Kaufman Hall's Jim Blake says favorable numbers may just be "the calm before the storm."
Hospital finances are still showing the effects of the sharp drop in healthcare utilization in the later part of March, April and May, according to latest hospital “flash report” from Kaufman Hall.
The August report, which is based on a national sample of 800 hospitals, says that for the first seven months of the year, hospital operating margins are down 96% compared with the first seven months of 2019. However, that proportion shrinks considerably, to a decrease of 28% relative to 2019, once money that the hospitals received from the CARES Act is
At the same time, the various financial and patient care figures that Kaufman Hall collects and tallies also show that the hospital sector has rebounded. Many of the numbers show favorable increases in July relative to June, and single-digit dips between July 2020 and July 2019. In the year-over-year, July-2020-to-July-2019 comparisons, operating margins were down 2%; operating EBITDA margins down 5%; discharges down, 6.7%; and operating room minutes, down 0.8%. Total gross revenue in July 2020 was down just 0.4%compared with July 2019, according Kaufman Hall — and that is before any CARES Act money factored
Emergency department visits are something of an outlier. In July, they were down 16.8% relative to July 2019. Jim Blake, the report’s main author and a Kaufman Hall managing director, said in an interview with Managed Healthcare Executive® this week that the reasons for the drop off in emergency department visits —which wasn’t confined to July — aren’t clear. Blake said that some low-acuity emergencies are perhaps being seen to in other settings and ways, including through telehealth visits.
Blake was cautious in characterizing the largely favorable numbers. He said they may reflect the “calm before the storm” of a second wave of the COVID-19 pandemic and referenced that the second wave of the 1918 flu epidemic was worse than the first.
Erik Swanson, a Kaufman Hall vice president and one of the report authors, said this report shows the re-emergence of some regional variability; for example, according to some patient volume statistics, hospitals in the Northeast, the Mid-Atlantic region and Midwest are lagging behind those in the South, West and the Great Plains.