Top 5 Healthcare Finance KPIs: March 2021

One full year after COVID-19 began wreaking havoc on hospital operations, U.S. hospitals and health systems achieved a financial milestone: For the first time since February 2020, operating margins are in the black without CARES Act funding. Volumes decreased across most metrics year-to-date (YTD) but increased compared to particularly low volumes in March 2020.

Year-over-year (YOY) margins rose more than 125%, but results are tempered by the significant losses in March 2020 when much of the nation shut down.

Here are the March 2021 financial KPIs for U.S. hospitals and health systems:

#1 —  Operating Margins remain narrow

Median Operating Margin in March was 1.4% without CARES funding and 2% with CARES.

#2 — ED Visits still down

Emergency Department Visits fell 19.2% YTD and 3% YOY.

#3 — Discharges rise YOY and MOM

Adjusted Discharges increased 1.8% YOY and 12.7% month over month (MOM), but decreased 8.2% YTD.

#4 — Length of Stay rises YTD and YOY

Average Length of Stay rose 8.3% YTD and 4.1% YOY, but declined 4.3% MOM.

#5 — YTD Expenses increase

Costs related to the pandemic pushed Total Expense, Total Labor Expense, and Total Non-Labor Expense each 4% higher.

Monthly spotlight: Operating Room Minutes

While surgery volumes remain lower than pre-pandemic numbers, signs of recovery are emerging. Operating Room Minutes increased 21.1% MOM (9.7% on a daily adjusted basis) and 3.1% YTD. Compared with March 2020, when many outpatient and elective surgeries were halted by mid-month, Operating Room Minutes jumped 43.9% YOY.

The increase in OR Minutes suggests that concerns over possible exposure to COVID-19 are easing as fewer people delay non-urgent procedures and tests.

Turning data into action

This month’s numbers reflect increasing consumer confidence in obtaining healthcare, but the nation’s hospitals and health systems must take proactive steps to cut costs while maximizing resources and preparing for fairer weather ahead. Comparing pre-pandemic volumes and utilization by department to current numbers can help hospitals and health systems right-size their services going forward while anticipating future utilization.

Axiom™ Enterprise Decision Support (EDS) empowers healthcare organizations to improve financial, operational, and clinical performance by integrating accurate, flexible, and comprehensive data to support strategic and tactical analysis. EDS users drive decision-making with insightful views of volume, cost, and profitability measures across service lines, physicians, payers, cohorts, and populations.