Hospital Operating Margins Rise Despite Ongoing Expense Increases, According to New Syntellis Performance Solutions Data

Improvements Mark a Possible Turning Point Toward Greater Financial Stability for Nation’s Hospitals

CHICAGO – June 27, 2023 – New data from Syntellis Performance Solutionsthe leading provider of enterprise performance management software, data, and intelligence solutions, shows U.S. hospitals are stabilizing financially as higher patient volumes and revenues contribute to much-needed operating margin improvements, even as expenses continue to grow.

Median hospital operating margins rose in May for the first time since breaking into the black in March 2023, following 15 straight months of negative operating margins. The median, actual year-to-date operating margin — which represents median operating margins for hospitals nationwide — rose slightly to 0.7% for the month.

“Hospital operating margins remain uncomfortably thin, but the uptick is a welcome shift after median margins teetered at 0.4% in March and April,” said Steve Wasson, Executive Vice President and General Manager for Data and Intelligence Solutions at Syntellis. “Overall, May was a positive month for hospitals and health systems nationwide and could signal a turning point as these critical organizations gain more stable ground after so many months of financial losses.”

Median Hospital Operating Margins

Growth in patient volumes and revenues, especially for outpatient services, contributed to the operating margin improvements. Outpatient revenue had a sizable, double-digit increase, jumping 14.3% compared to May 2022. It marked the biggest year-over-year (YOY) increase in the metric since January 2022. Compared to April 2023, outpatient revenue rose 9.3% in May.

The increases reflect ongoing growth in outpatient care and helped push median gross hospital operating revenue up 12.2% YOY and 7.2% month-over-month. Inpatient revenue was up 6.5% versus the same month last year and 4.2% compared to April 2023.

Patient volumes continued to grow. Adjusted Discharges rose 9.5% YOY and 7.1% month-over-month. Inpatient and outpatient surgery volumes grew, with operating room minutes up 5.4% versus May 2022 and 8.5% from April 2023. Emergency department visits increased 2.6% YOY and 7.9% month-over-month. 

At the same time, hospitals continued to endure long-running cost increases. Hospital expenses rose for the 13th consecutive month of YOY increases for both total expenses and total non-labor expenses, up 4.6% and 8.3%, respectively. Total labor expenses were up 1.3%, for the 12th increase in 13 months.

Per-patient expenses, however, decreased across most metrics, suggesting that hospitals are better managing expenses as patient volumes increase. Total expense per adjusted discharge dropped 6.3% YOY, and labor expense per adjusted discharge was down 9.3%. Supply and drug expenses increased for both total and per-patient metrics, due in part to the effects of inflation. Drugs had the biggest YOY increases at 12% for total drug expense and 2.9% for drug expense per adjusted discharge. Total supply expense rose 11.7% YOY, and supply expense per adjusted discharge increased 2.4% YOY.

About the Data

This data will be featured in the upcoming Syntellis Performance Trends report — issued monthly — which 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. The report also features data from Syntellis’ Clinical Analytics™ and the Syntellis All-Payer Claims Data (APCD) - Longitudinal Claims database.

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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Press Contact:
Cam Granstra
Syntellis Performance Solutions