Hospital margins increased slightly in September to 5.1%, according to data from Strata.
"While median operating margins appear to be stabilizing for our nation’s hospitals, operating margins for broader health systems declined throughout the third quarter of this year," said Steve Wasson, chief data and intelligence officer at Strata Decision Technology. "These declines illustrate the broader impacts of persistent high costs as expenses continue to grow across both labor and non-labor categories. Unfortunately, these kinds of sustained increases will likely continue, further pressuring healthcare organizations in the fourth quarter."
Hospital margins are ticking up even as expenses grow. Big jumps in outpatient revenue reflect changing hospital strategy.
Here are 10 statistics from the report, based on data from 1,600 hospitals.
1. Hospital operating margins hit 5.1% on average in September, up from 4.9% in August.
2. Hospital margins increased 2.1 percentage points year over year in September.
3. Hospital margins in the West and Great Plains regions increased the most year over year, seeing 3.9 percentage point spikes.
4. Hospitals in the Northeast and Mid-Atlantic reported just 1.1 percentage point increases.
5. Outpatient revenue jumped 9.1% year over year while inpatient revenue grew 6.4%.
6. Median EBITDA margin for hospitals was up 1.8 percentage points year over year in September, but down 0.2 percentage points month over month.
7. Hospital expenses dropped 2.2% month over month, and increased nearly 6% year over year.
8. Total non-labor expenses jumped 6.3% with purchased services increasing 8.8%.
9. Supply expenses increased 8.6% and drug expenses were up 6.8% year over year.
10. After adjusting for patient volumes, net patient service revenue per adjusted discharge was up 4.2% year over year.