Hospitals margins fell as COVID-19 pandemic ramped up
U.S. hospitals were already facing falling margins when the COVID-19 pandemic began to ramp up in the nation.
That’s according to the National Hospital Flash Report from Kaufman Hall, which provided a snapshot of the performance of U.S. hospitals in February 2020. COVID-19 is expected to have a significant impact on hospitals over the coming months, changing the outlook for healthcare providers in the U.S.
EBITDA margins dropped 92.7 basis points year over year in February, while operating margin declined 73.2 basis points. Operating EBITDA margin dropped 162.9 basis points and operating margin fell 206.4 basis points.
Margins fell thanks to lower volumes from January 2020 and higher expenses.
While margins were down for the month, following the same trend observed in January, volume and revenues both rose in February on a year-over-year comparison. Volumes fell on a monthly basis, however, dropping from January to February.
Net patient service revenue per adjusted discharge rose 3% year over year and 0.7% in February compared to January. NPSR per adjusted patient day saw a small year-over-year increase of just 0.1%, but a 0.9% rise from January.
At the same time, expenses rose for hospitals. Total expense per adjusted discharge increased 2.2% year over year, and 3.3% from January. It was also 1.5% above budget. Labor expense per adjusted discharge also saw the biggest year-over-year rise among all other expense metrics, rising 3.4%.
Drug expenses were up 2.4% compared to the same month in 2019, but fell 1.1% from January 2020.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."