Hospital patient volumes declined overall at the end of 2025 but financial performance remained steady, according to Kaufman Hall’s “National Hospital Flash Report” released January 15.
“While month-to-month hospital performance softened in November, on a year-to-date basis, revenue and margins are still strong compared to previous years,” said Erik Swanson, managing director and data and analytics group leader at Kaufman Hall. “The continued rise in expenses requires attention. For hospital leaders, managing overall spend as patient volumes fluctuate is an ongoing challenge.”
Kaufman Hall, a Vizient company, developed the report based on data from more than 1,300 hospitals collected by Strata Decision Technology.
Five takeaways from the report:
1. Overall year-to-date operating margins hit 2% in November, up from 1.3% in December 2024 but down from 2.5% in July through September. Financial performance varied by region; hospitals in the West reported a 16% drop in operating margins while hospitals in the Northeast / Mid-Atlantic reported 16% year over year increase.
2. Operating margins dropped 15% and operating EBITDA margin declined 15% month over month in November. Year to date, hospital operating margins were up 3% and operating EBITDA margins rose 2% year over year.
3. Net operating revenue per calendar day dropped 6% month over month but was up 5% year over year in November. Inpatient revenue was up 7% and outpatient revenue climbed 6% year over year. Both reported single-digit declines month over month.
4. Bad debt and charity care per calendar day declined 4% month over month but is up 12% year to date compared to 2024. Over the last three years, bad debt and charity care per calendar day rocketed 40%.
5. Expenses per calendar day increased 5% year over year and 7% year to date compared to 2024. Expenses overall increased 18% since 2022, with the biggest increases coming from supply and drug expenses. Labor expense increases have been more modest. Here is the breakdown:
Labor
- Flat month over month
- 4% year over year
- 5% year to date over 2024
- 12% year to date over 2022
Supply
- -10% month over month
- 6% year over year
- 8% year to date over 2024
- 26% year to date over 2022
Drug
- -12% month over month
- 10% year over year
- 11% year to date over 2024
- 29% year to date over 2022
The post Hospital margins hit 2% but regional gaps widen appeared first on Becker's Hospital Review | Healthcare News & Analysis.
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