Hospital Revenue Starts Recovering from COVID-19 Losses Slow & Steady
According to a recent report, the hospital revenue, margins, and volumes of the hospitals have slightly increased in April 202, both on a year-to-date and year-over-year basis. However, speaking in terms of recovery from the losses incurred due to COVID-19, it is a long way to go. The margins are still thin, and hospital financial performance is below that of last month.
A Bit More about the Report…
The report consists of analyzed data from more than 900 hospitals across the country, consisting of large hospitals, as well as, small critical access hospitals.
- The operating margin of the hospitals increased by 8.6 percentage points in April 2021, as compared to that of January – April 2020. However, when the CARES Act funding was taken into consideration, the marginal increase was by 6.9 percentage points. The figures, when compared to that of April 2020, are better by 39.3 percentage points without CARES funding in play and 21.4 percentage points when CARES funding is taken into consideration.
March and April 2020 were two of the most devastating months for the hospitals and healthcare systems of the country. During this time, the sole focus was on treating patients who were impacted due to the first wave of the pandemic. Though the data from the following months showed a slight gain than that of the earlier months of the year, the overall margins stayed low, as the entire health system struggled to come out of the pandemic.
- However, this year, things are starting to get better. Emergency department visits have increased by 57.2 percent on a year-over-year basis and 5.3 percent month-over-month. Adjusted patient days and discharges have seen a significant rise on a year-to-date and year-over-year basis but are still lagging by one percent on month-over-month.
- On the other hand, operating room minutes have increased by a massive 189.2 percent on a year-over-year basis. Researchers feel that the decrease in the severity of COVID-19 is responsible for this jump, as most of the outpatient procedures were either severely decreased, or stopped during the pandemic.
Hospital revenues, as well as, both inpatient and outpatient services have increased year-to-date and year-over-year, but are slightly down as compared to last month. The financial strain of the pandemic is still prominent amongst hospitals, despite the CARES Act fund in the picture. The total expense has increased by 13.1 percent year-over-year and 6.6 percent year-to-date. However, the spending figures for April were down by around 3 percent from last month.
The report predicts that the hospitals and healthcare system of the country will witness gains in margin, volume, and hospital revenue generation in the upcoming months, as compared to the severe losses during the early months of the pandemic. There might be some fluctuations in the month-over-month figures.
Several factors are influencing the speed of recovery, including the continued spread of COVID-19 variants and the trajectory for vaccination efforts. Healthcare leaders, however, have been advised to remain vigilant for monitoring and improving the overall performance as the country moves through the second year of the ongoing pandemic.
Recently, the lawmakers have urged HHS to reconsider the deadline for using the funds from the Provider Relief Fund under the CARES Act. Other than that, it will be a challenging task for the hospitals to improve their financial performance soon.