Hospital operating margins showed a slight improvement in September, reaching a year-to-date operating margin of 5.1%, which was higher than the previous months.

The broader U.S. health systems faced challenges, with operating margins declining for the third consecutive month to a median of 1.6% in September.

The analysis of hospital margins revealed a year-over-year increase of 2.1 percentage points.

Regional Disparities

Regional disparities were evident, with hospitals in the Northeast/Mid-Atlantic seeing a median increase of 1.1%, while those in the West and Great Plains experienced a more significant rise of 3.9%.

Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margin

The median change in operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin for hospitals rose by 1.8 percentage points year-over-year.

Gross Hospital Revenues

Gross hospital revenues showed substantial year-over-year growth in September, with outpatient revenue leading the way with a 9.1% increase and inpatient revenue also rising by 6.4%.

Overall, gross operating revenue increased by 8.7% year-over-year.

However, on a month-over-month basis, outpatient revenue declined by 4.8%, inpatient revenue decreased by 3.2%, and gross operating revenue fell by 4.2%.

Net Patient Service Revenue (NPSR)

Net patient service revenue (NPSR) per adjusted discharge and NPSR per adjusted patient day showed positive trends year-over-year, but there were fluctuations on a month-to-month basis.

Total Non-Labor Expenses

Hospitals experienced year-over-year increases in total non-labor expenses, driven by notable increases in purchased services, supply expenses, and drug costs.

Total labor expenses also rose, contributing to an overall total expense increase.

However, there was a decrease in total expenses on a month-over-month basis, providing some relief to hospitals.

Patient Demand

Patient demand showed a decline on a month-over-month basis, but there was an increase in both inpatient and outpatient volumes year-over-year.

Outpatient visits experienced the most significant increase, while observation visits and emergency visits saw decreases.

Despite the recent declines, the two-year comparison showed a positive trend in inpatient admissions and outpatient visits.

These insights into hospital margins, revenue trends, and patient demand will be crucial for stakeholders in the healthcare industry.