Hospital Operating Margins Hover Just Above Zero for a Second Month, Even as Expenses Continue to Climb, According to Latest Syntellis Performance Solutions Report
Syntellis data shows a full year of increases in total expenses, labor expenses up 11 of past 12 months
CHICAGO – June 7, 2023 – Syntellis Performance Solutions, the leading provider of enterprise performance management software, data, and intelligence solutions, today released its monthly Syntellis Performance Trends-Healthcare report, which shows hospital finances stabilized despite ongoing expense increases.
In April 2023, hospital operating margins hovered just above zero for a second consecutive month following 15 months of negative operating margins, as revenue growth continued to outpace expense increases. The median, actual year-to-date operating margin — which represents median operating margins for hospitals nationwide — held steady at 0.4% for the month, the same as in March.
At the same time, hospital expense increases persisted. April marked the 12th month of year-over-year (YOY) increases in total expense and total non-labor expense, which rose 2.2% and 3.7%, respectively. Total labor expense increased YOY for 11 of the past 12 months, including a 1.1% YOY rise in April.
“While a steadying of hospital operating margins is a positive sign, our nation’s hospitals and health systems remain on dangerously thin ice with extremely narrow operating margins,” said Steve Wasson, Executive Vice President and General Manager for Data and Intelligence Solutions at Syntellis. “Healthcare leaders are finding ways to meet evolving patient needs and grow revenues, but relentless expense increases and other economic and industry challenges threaten to plunge them back into the red at any time.”
Elevated labor expenses for nurses are one area contributing to high hospital expenses. An analysis of per-patient expenses for nursing labor showed that costs remain significantly above those seen just two years ago, illustrating some of the long-term effects of widespread labor shortages. Nationwide, nursing labor expense per patient day jumped 17.6% in April versus April 2021. A recent study by the National Council of State Boards of Nursing found about 100,000 registered nurses left the workforce over the past two years, and more than 610,000 more plan to leave by 2027 due to high levels of stress, burnout and other factors.
In another concerning trend, U.S. hospitals saw increased bad debt and charity care in April, up 15% YOY and 7.6% month-over-month. Declines in Medicaid enrollment as states roll back COVID-19 pandemic provisions may contribute to further increases in the metric in coming months. The Kaiser Family Foundation projects that as many as 17 million people could lose coverage due to the policy changes.
About the Data
The Syntellis Performance Trends report — issued monthly — uses data from Syntellis’ Axiom™ Comparative Analytics, which offers access to near real-time data drawn from more than 135,000 physicians from over 10,000 practices and 139 specialty categories, and from 500+ unique departments across more than 1,300 hospitals. Powered by Syntellis IQ, Axiom Comparative Analytics also provides data and comparisons specific to a single organization for visibility into how their market is evolving. This month’s report also features data from Syntellis’ Clinical Analytics™ and the Syntellis All-Payer Claims Data (APCD) - Longitudinal Claims database.
Syntellis Performance Solutions provides innovative enterprise performance management software, data, and intelligence solutions for healthcare organizations. Its solutions include enterprise planning, cost and decision support, and financial and clinical analytics to elevate organization performance and transform vision into reality. More than 2,800 organizations and 450,000 users rely on Axiom, Connected Analytics, and Stratasan software. With an HFMA Peer Review designation for nearly a decade and No. 1 rankings from Black Book Research multiple years running, Syntellis helps healthcare providers acquire insights, accelerate decisions, and advance their business plans. For more information, please visit www.syntellis.com.
Syntellis Performance Solutions