Dive Brief:

• Kaufman Hall says September was a month of mixed performance for hospitals. Although margins were up year-over-year, month-over-month performance was mostly in decline.
• The same could be said for patient volume, which was up compared to September 2018 but down compared to August of this year.
• Expenses and revenue saw similar mixed performances, up compared to a year ago but down slightly month-over-month.

Dive Insight:

The nation's hospitals are more profitable than a year ago, but posted far from stellar month-over-month figures, according to Kaufman Hall's flash October hospital report, based on September data from more than 600 hospitals nationwide.

According to Kaufman Hall, pre-tax operating earnings were up 13.5% compared to September 2018, and margins were up 16.9%. The Chicago-based company attributed much of that to fee-for-service patient growth.

However, things were less rosy on a month-to-month basis, as both pre-tax earnings and margins were down slightly. There were similar disparities regarding patient volumes and discharges. Kaufman Hall officials attribute that in part to an increased average length of stay as well as increased patient acuity, which drove up costs.

Total expense per patient discharge was down 1.5% year-over-year but up 3.4% month-over-month. Labor expenses per adjusted discharge were up 4.2% in September 2019 compared to the prior month. Non-labor expenses grew 2.4% during that same period.

"We now are observing a greater degree of variance in profitability performance each month as we head into the winter season," Jim Blake, managing director at Kaufman Hall, wrote. "Revenue performance continued to be strong as compared with last year, but several monthly declines indicate that leaders need to keep an eye on their revenue performance drivers."

Discharges were up 2.8% compared to a year ago but down 3.8% compared to August of this year. Seasonal adjustments meant discharges were up 2.9% year-over-year but were down 5.5% month-over-month. Operating room minutes were up 5.7% compared to a year ago but down 6.6% compared to this August.

Net patient service revenue was up 3.7% compared to September 2018 but down 0.2% month-over-month.

However, charges for bad debt and charity care both declined. They were down 4.8% compared to a year ago and 4% compared to August 2019.