Hospital finances decline in July

Hospitals saw a worsening financial performance in July compared to June, according to the National Hospital Flash Report from Kaufman Hall. Volumes decreased while bad debt and charity care increased, creating a difficult situation for hospitals.

Even though volumes were down, the median calendar year-to-date operating margin index for hospitals was 1.3% in July, down slightly from 1.4% last month. Lower patient volumes led to a decline in expenses, but not enough to offset revenue loss, according to the report. Adjusted discharges per calendar day decreased 7% from the previous month. There was a greater decline in volume on the outpatient side, which may have been caused by patients not pursuing elective procedures during the summer.

Hospitals and patients are seeing the effects of Medicaid eligibility redeterminations, as more than 30 states removed previous enrollees from eligibility in June and July.

“It’s clear that today’s challenging financial environment is here to stay, and hospital leaders must be proactive in seeking out opportunities to refine their operations and remain competitive,” said Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, in a statement. “Collecting good data and feedback is essential for making timely, evidence-based process improvements.”

According to the report, hospitals have struggled to transition patients to post-acute care settings due to lack of space in many facilities. “Developing ongoing relationships with local nursing homes to establish a clear pathway for discharge can reduce patients’ length of stay and get them the care they need afterward,” the report reads in part.

“Hospitals that prioritize care transitions are performing better than institutions who do not,” said Swanson. “Identifying steps that can ensure a smooth transition, such as obtaining prompt pre-authorizations and planning discharge early, will help organizations reduce expenses and improve patients’ experience.”

The report draws on data from more than 1,300 hospitals from Syntellis Performance Solutions.