Delta dragged down hospital margins in September: Kaufman Hall

 

• The median change in operating margins for hospitals fell 18.2% in September compared to August, according to the latest monthly report from Kaufman Hall, a hospital consultant group.
• Patient volumes declined in almost every key category, including emergency room visits and operating room minutes, potentially signaling that the rise in the delta variant caused some to once again defer care out of concern over contracting the coronavirus. Outpatient revenues declined, too, further underscoring this potential trend.
• Although fewer patients were admitted, patients were sicker and stayed longer. The average length of stay is also trending above pre-pandemic levels. 

The latest report signals continued turbulence in the pandemic recovery for hospitals. 

One key area that continues to weigh on hospitals' performance is labor supply issues. It has been well documented how labor supply is tight for many hospitals throughout the country, causing them to hike rates for contracted labor. 

That also was reflected in the latest report from Kaufman Hall. Labor expenses per adjusted discharge increased 9.5% from August to September, and nearly 16% compared to pre-pandemic levels. 

Overall, total expenses were up about 10% compared to pre-pandemic figures. 

In addition to increased labor costs, drug expenses have also increased considerably along with supply costs, which "point to worldwide supply chain issues," Kaufman Hall said. 

A separate report released in mid-October also found that hospitals are still spending more on personal protective equipment and labor, according to group purchasing organization Premier.

Contract labor is also contributing to rising expenses as hospitals try to fill gaps with traveling nurses, who often command a higher rate, according to a recent survey from Aya Healthcare, a staffing firm. 

On the other hand, a separate report from Kaufman Hall noted that physician productivity and revenue is on a strong rebound, surpassing pre-pandemic levels in the third quarter, according too an analysis of data from nearly 100,000 employed physicians. 

This marks the "second consecutive quarter of significant physician revenue increases" after holding steady.

https://www.healthcaredive.com/news/delta-drags-down-hospital-margins-september-kaufman-hall/609280/