Kaufman Hall's latest National Hospital Flash Report reveals that performance indicators are mostly holding steady.
As more patients received care to kick off the new year, expenses continued to rise, resulting in a balanced financial performance for hospitals in January, according to Kaufman Hall's National Hospital Flash Report.
The research, which draws on data from more than 1,300 hospitals nationwide, found that that the median monthly operating margin index for January was 8%, bringing the calendar-year-to-date figure up to 5.1%.
For the first time in one of its reports, Kaufman Hall included hospital margin performance with the inclusion of all allocations for the cost of shared services that they receive from their health system. Including all allocations, the median monthly and calendar-year-to-date operating margin index was 4.4%.
"January was a relatively stable month for hospitals, as more people received care due in part to seasonal challenges like flu and other respiratory diseases," Erik Swanson, senior vice president and data and analytics group leader with Kaufman Hall, said in a statement. "Hospitals are also experiencing more rapid revenue growth from inpatient than outpatient services. Expenses are also rising, driven primarily by drug costs, though the rate of cost growth has slowed."
In terms of volume, January saw month-over-month increases in discharges per calendar day (5%), adjusted discharges per calendar day (2%), equivalent patient days per calendar day (6%), adjusted patient days per calendar day (4%), average length of stay (2%), and operating room minutes per calendar day (2%).
More patients were treated in the hospital and emergency room, resulting in inpatient revenue growth outpacing outpatient revenue growth month-over-month on a per calendar day basis, 8% to 3%, respectively.
Net operating revenue per calendar day rose 1% from the previous month, while gross operating revenue per calendar day jumped 5% from December.
Expenses ticked up at a modest rate, with total expense per calendar day increasing 1% month-over-month, largely driven by 2% growth in labor expense per calendar day and 1% growth in drug expense per calendar day.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
The first National Hospital Flash Report for 2025 highlights greater service volume in January, stemming from more patients receiving treatment in inpatient settings.
However, expenses are still cutting into revenue gains, with labor and drug costs continuing to hamper hospitals.