US hospitals saw some recovery in May but distress ‘far from over’

Dive Brief:

  • U.S. hospitals saw signs of recovery in May with median operating margins reaching 4% thanks to COVID-19 relief aid from Congress and volume increases, according to Kaufman Hall’s flash report for the month.
  • Adjusted discharges were up 30% month over month and surgery minutes nearly doubled in May compared to April. Adjusted patient days and emergency room visits also increased, according to the report published Wednesday.
  • Still, all figures were significantly down from May 2019. Total gross revenue was down 14% year-over-year, led by a 27% drop in outpatient revenue.

Dive Insight:

The numbers are a spot of good news for hospitals following record-low performance in April. Most health systems resumed elective procedures last month after halting them starting in March, helping pump in much needed revenue.

The improvement is also helped by funding from the Coronavirus Aid, Relief, and Economic Security Act, which allocated $100 billion to hospitals. The money has been doled out in multiple tranches, some broad-based and others targeting facilities in hot spots and rural areas. 

But volumes are far from fully recovered, and worries about hospital capacity have re-emerged as several states show increasing hospitalizations.

“While the May results offer signs of hope, they also serve as a reminder of the long road ahead. This pandemic is far from over, and the road to recovery likely will not be a consistent upward slope, but rather a series of peaks and valleys,” according to the report. “Different organizations will move at different speeds along divergent paths depending on numerous factors, such as available resources, fluctuations in coronavirus cases, consumer sentiment, and additional aid.”

Congress is still debating the potential for more federal aid to hospitals. The Democrat-controlled House passed $3 trillion legislation last month that carves out another $100 billion for health systems, but the bill has not gained traction in the Senate or White House.

Kaufman Hall found that the Northeast region had the greatest year-over-year decreases in volume and the smallest drop was found in the West. That is likely to reverse in future reports as COVID-19 spikes have mostly been reported in western states and former hotspots like New York have seen improvement.

Across the board, expenses were up slightly month over month but down more than 6% year over year. Kaufman Hall attributed this to the implementation of furloughs and other cost-cutting measures.

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