Hospital spending rose again just before omicron arrival, the report shows

Diving card:

  • COVID-19 hospital admissions rose 25% in November, narrowing hospital margins as systems continued to struggle escalating spending and nationwide labor shortages, according to Kaufman Hall’s latest flash report from the National Hospital, released Tuesday.
  • The highly contagious omicron variant had not yet risen in the U.S. in November, although virus concerns drove volume declines month after month across most measurements, the report found.
  • Expenditure growth continues to exceed revenue growth, and labor costs in particular continue to rise. Labor expenses per Adjusted discharge increased 2.7% month-on-month in November and up 26.4% compared to pre-pandemic levels.

Diving insight:

Workloads continued to create operational and financial challenges for hospitals in November in the middle of “Great Resignation, “as the U.S. labor market faces significant departure in the midst of COVID-19.

A record 4.5 million people quit their job in November. Health and social care workers had the second-highest layoff rate across all industries at 6.4%, according to preliminary data from the Bureau of Labor Statistics.

“Hospitals are struggling with higher labor costs despite lower staffing levels due to intense competition for qualified healthcare professionals,” said Erik Swanson, senior vice president of data and analysis at Kaufman Hall, in a release on the report. “In addition, the highly contagious Omicron variant could put more pressure on hospitals in the coming months.”

That, combined with supply chain problems, continues to increase spending on hospitals as spending per capita increases. patient rose across all goals in Kaufman Hall’s report as a user data from more than 900 hospitals.

And in another stress factor, volumes declined slightly during the period despite systems reporting recent recovery in some service lines, such as emergency departments.

Emissions, adjusted discharges and adjusted patient days decreased 4.8%, 3.9% and 2.4% month over month, respectively.

Cases of higher sharpness requiring longer stays led to the average length of stay increasing 0.8% month by month.

But overall, lower volumes led to a slight decline in total hospital revenue in November, according to the report.

Compared with the previous month, gross operating income, excluding federal emergency aid financing, decreased by 0.6%, hospitalization income decreased by 2.6%, and outpatient income decreased by 0.7%.

Year-to-date and year-to-year revenues, however, remained high compared to both 2019 and 2020 levels for the ninth month in a row.

In a bright spot, hospital Operating margins actually improved, up 8.1% from the previous month after two months of sequential declines, the report found.

Though Operating margins improved for hospitals in November, still significantly lower than pre-pandemic levels, with the median change in operating margin declining by 22.1% compared to November 2019 without including federal emergency funding, according to the report.

Give a Comment