For U.S. hospitals and health systems, 2022 is shaping up to be the worst year of the pandemic in terms of financial performance, according to the latest National Hospital Flash Report from Kaufman Hall.
Facilities are now experiencing “some of the worst margins” since COVID-19 emerged, the report stated. The finding comes as gains that hospitals saw in recent months reversed in July.
Specifically, the median Kaufman Hall operating margin index was -0.98% through July, according to the report. The median percent change in operating margin in July was -63.9% from June 2022 and -73.6% from July 2021.
It’s worth noting that, even in the good years, pre-pandemic margins are “typically quite narrow,” such as in the 3.5% to 4% range, Erik Swanson, MPH, MS, a senior vice president of data and analytics with Kaufman Hall, told MedPage Today. That narrow margin is what is allowing organizations to reinvest.
Now, more than halfway through 2022, having operating margins well into the negative zone and down 73% year-over-year is “very, very troubling,” Swanson said. “It’s really quite stark.”
The report notes that outpatient volumes “shrunk revenues,” and that expenses jumped up from June. Additionally, hospitals can “no longer count on supplemental federal funding to buffer