Kaufman Hall Perspective
Kaufman Hall Perspective
Operating performance improved at hospitals nationwide in October. Month-over-month performance showed the most significant gains. Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margin was up 250.1 basis points (bps) month over month, while Operating Margin was up 285.7 bps. Operating EBITDA Margin was up 85.1 bps year over year, and performed 44.4 bps above budget. Operating Margin rose 86.2 bps year over year, and was up 68.5 bps to budget. Contributing factors include increased volumes, modest revenue gains, lower Bad Debt and Charity care, and decreases across most expense metrics.
Volume performance was mixed in October, but improved across most metrics. Discharges rose 1.5 percent year over year and 4.8 percent month over month. Adjusted Discharges increased 2.9 percent year over year and 6.3 percent month over month, while Adjusted Patient Days rose 3.5 percent year over year and 5.1 percent month over month. Operating Room (OR) Minutes saw the greatest variances, jumping 14.9 percent month over month and 4.7 percent year over year. Meanwhile, Average Length of Stay (LOS) and Emergency Department (ED) Visits both saw volumes decrease.
Hospitals across the country saw decreases in labor expenses in October, while most non-labor expenses increased. Total Expense per Adjusted Discharge was down slightly -0.2 percent year over year, and -1.9 percent month over month, performing just -0.3 percent below budget. Labor Expense per Adjusted Discharge was down -1.8 percent year over year, and -3.1 percent month over month, performing -2.1 percent below budget. By contrast, Non-labor Expense per Adjusted Discharge was up 1.4 percent over the same period last year and 1.8 percent above budget, but down -1.1 percent month over month.
U.S. hospitals saw modest revenue gains in October, coupled with decreases in Bad Debt and Charity care. Net Patient Service Revenue (NPSR) per Adjusted Patient Discharge rose 1.5 percent year over year and 1.2 percent month over month, and NPSR per Adjusted Patient Day rose 1.5 percent year over year and 2.2 percent month over month. Bad Debt and Charity as a Percent of Gross was down -4.8 percent both year over year and month over month, and was -5.2 percent below budget.
The Federal Reserve cut rates for the third time this year at its October meeting, but signaled that it would make no further rate cuts in 2019. U.S. manufacturing remained in contraction for the third consecutive month, despite overall economic growth marked by an initial third-quarter Gross Domestic Product (GDP) growth estimate of 1.9 percent, which exceeded expectations. Meanwhile, the labor markets added 128,000 jobs in October, down from 136,000 in September. The 30yr Treasury continued its upward trajectory in October with a 7 bps increase, but remained 121 bps lower year over year.
James Blake
Data Science and Analytics
Scott Engel
Erik Swanson
Samantha Schwind
Ian Crane
Will Newton
Brian Hubbard
Scott Engel
John Hughes
Data Operations
Jared Murray
Profitability, Dan Majka
Subject Matter Specialists
Profitability, Kristopher Goetz
Volume, Brian Pisarsky
Volume, Jeff Kilpatrick
Revenue, John Bauerlein
Expense, Gregg Lambert
Expense, Therese A. Fitzpatrick
Non-Operating, John Andersen
Non-Operating, Ilan Weissberg
Volume, Tina Pike
Revenue, Tim Shoger
Non-Operating, John Ahn
Non-Operating, Garrett Johnson
Spotlight Contributor
Brian Hubbard
Rob Fromberg
Carolyne Krupa
Todd Fitz
Brian Cole
Rob Kunzler
Hillary Ervin
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