Hospital Operating Margins Increase for Second Month but Remain Narrow, According to New Syntellis Performance Solutions Data

Patient volumes weaken across most metrics heading into flu season

CHICAGO – Oct. 30, 2023 – A new data report from Syntellis Performance Solutions, now part of Strata Decision Technology, shows that healthcare organizations nationwide continued to see positive gains in September, but overall financial performance remains unstable. 

Hospitals nationwide had a median operating margin — measured as actual year-to-date operating margin — of 1.6% for the month, up slightly from 1.4% in August. The increase marked a seventh consecutive month of positive operating margins, and a second consecutive month of increases after margins slid downward from 2% in June to 1.1% in July.  

“Hospitals remain on a slow path to recovery,” said Steve Wasson, chief data and intelligence officer with Strata Decision Technology. “They are headed in the right direction with seven months of sustained positive operating margins, but those margins remain low. Hospitals have a long road ahead before they reach more sustainable financial performance, and high costs will remain a significant concern for the foreseeable future.”

Median Hospital Operating Margins Nationally, Year to Date Chart


Total hospital expenses continued to rise in September compared to the same month last year. Total expense rose 3.0% year-over-year (YOY), total labor expense rose 2.4% YOY, and total non-labor expense was up 3.7% YOY. However, hospitals saw some relief as total expenses decreased compared to August 2023. Total expense, total labor expense, and total non-labor expense each decreased 2.8%, 2.4%, and 3.3% month-over-month, respectively.  

Expenses were mixed when adjusted for patient volumes. Total expense per adjusted discharge was essentially flat, decreasing just 0.4% YOY in September. Labor expense per adjusted discharge was down 1.2% YOY, while non-labor expense per adjusted discharge increased 1.3% YOY.  

Hospital patient volumes weakened across most metrics in September, and likely will remain volatile throughout flu season. Adjusted patient days decreased 0.8% YOY and were down 5.1% from August to September 2023. Emergency department visits were flat YOY and decreased 3.6% month-over-month, and operating room minutes were down 2.9% from September 2022 and dropped 9.8% from August 2023. Adjusted discharges were an exception, as the metric increased 2.4% versus September 2022 but dropped 6.9% month-over-month. Hospital revenues remained on the rise YOY, with gross operating revenue up 6%, inpatient revenue up 4.3%, and outpatient revenue up 6.4%. 

High expenses continued to exert significant pressure on the nation’s physician practices in the third quarter. Total direct expense per physician full-time equivalent (FTE) jumped 11.6% from Q3 2022 to $996,776 in Q3 2023. Compared to Q2 2023, the metric was up 5.6%. Higher costs drove up the level of investment needed to subsidize physician practices, measured as median investment per physician FTE. The metric jumped 13.6% from Q3 2022 and 3% from Q2 2023 to $302,374 in Q3 2023.  


About the Data 

This report uses data from Syntellis’ Axiom™ Comparative Analytics. The solution 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. 

About Strata Decision Technology 

Strata Decision Technology provides a cloud-based platform for software and service solutions to help healthcare providers better analyze, plan, and perform in support of caring for their community and reducing the cost of care. More than 800 healthcare delivery systems rely on Strata’s StrataJazz and Axiom solutions. Strata has been named the market leader for Business Decision Support for 17 consecutive years, and its Axiom solutions have maintained HFMA Peer Review designation for nearly a decade along with No. 1 rankings from Black Book Research for multiple years. Founded in 1996, our mission is to Help Heal Healthcare, working with hospitals and healthcare systems to drive margin to fuel their mission. For more information, please go to   

About Syntellis 

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


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Media contact: 

Sally Brown, Inkhouse