July 2020
EBITDA Margin by Region *
Excluding CARES funding, operating EBITDA Margins were up slightly year-over-year for the West and Great Plains regions, and down year-over-year for the others. Only the Great Plains and the South exceeded budget expectations. The Great Plains had the biggest year-over-year increase of 20%, due in part to a 15% increase in surgery volumes.
The Midwest had the least favorable variance to budget for Operating EBITDA Margin at -27%. Importantly, the percentage increases in each region is dependent upon the size of the organizations in that region, with the Great Plains having predominately smaller hospitals which are more greatly impacted by shifts in volumes.
% Change
Absolute Change
National Margin Observations
U.S. hospitals and health systems saw margins increase in June from prior months as they continued to benefit from federal aid, aggressive cost control efforts, and the recovery of non-urgent surgeries and other services that were cancelled or delayed in the early months of the COVID-19 pandemic.
Hospital margins improved in June following record-poor performance at the onset of the pandemic, when steep volume and revenue declines drove margins deep into the red with the shutdown of many non-urgent services in March and April. In June, funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act helped support hospital Operating Margins and Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margins. On a year-to-date basis, hospitals are still well below their historical margins due to the devasting impact in March, April, and May, with the YTD operating margin median at without CARES Act funding at around –200% (or 700bps lower) compared to typical operating margins. Even with CARES Act relief, YTD operating margins are about -50% (or 180bps lower) compared with 2019.
Excluding CARES relief, Operating EBITDA Margin declined 3% (or 47 bps) year-over-year. Operating Margin remained relatively flat, with just over 1% increase or 0 bps year-over-year change.

June’s margin results came as hospitals continued to grapple with highly reduced, but slowly recovering, inpatient and emergency department volumes.
Margin % Change
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Operating EBITDA Margin Less CARES
Operating Margin Less CARES
Unless noted, figures are actuals and medians expressed as percentage change
Margin Absolute Change
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Operating EBITDA Margin Less CARES
Operating Margin Less CARES
Unless noted, figures are actuals and medians expressed in basis points
EBITDA Margin by Bed Size
Margins increased year-over-year for hospitals of 0-25 beds and 100-199 beds, while all other cohorts saw decreases from last year and all bed size cohorts remained below budget. The smallest hospitals of 0-25 beds saw the greatest increases, increasing 15% year-over-year but still well below budget expectations. The percentage increase in these hospitals is primarily due to the resumption of outpatient elective procedures and servicing some of the pent-up demand along with their small size that makes them particularly sensitive to changes in volume.
% Change
Absolute Change
©2020 Kaufman, Hall & Associates, LLC
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