April brought continued high demand for care, which, combined with improved patient throughput, has the nation’s hospitals in a stronger operating position than this time last year, according to Kaufman Hall’s latest monthly performance update.
The firm’s operating margin index of nationwide hospitals was 3.3% across four months when including health system allocations for the cost of shared services and 6.9% when excluding those. That’s a 6% improvement in year-to-date operating margin compared to the first four months of 2024.
“Hospital performance from January to April outpaced the first four months of 2024, largely driven by patient volume and hospital efficiency,” Erik Swanson, managing director and data and analytics group leader with Kaufman Hall, said in a release.
Compared to the same period last year, hospitals logged a 7% increase in daily net operating revenue across four months, which was comprised of gains across both inpatient and outpatient revenues and supported by a 3% increase in net patient service revenue per adjusted discharge.
Month to month, April brough a 3% rise in daily net operating revenue, though that broke down into a 1% dip from inpatient revenue, a 6% rise in outpatient revenue and a 3% drop in net patient service revenue per adjusted discharge.
Among volume metrics, on a year-to-date basis and in comparison to 2024, hospitals notched a 4% rise in daily discharges, a 5% rise in adjusted daily discharges, a 3% increase in daily ED visits and a 1% bump in daily operating room minutes—all while reducing average length of stay by 1%, which Swanson said “indicates that hospitals are triaging, treating, and discharging patients efficiently and appropriately.”
The changes were a bit more mixed compared to March, which marked the tail end of a busy flu season. Month over month, hospitals had a 1% drop in daily discharges, a 4% rise in daily adjusted discharges, a 1% dip in daily ED visits, a 7% rise in daily operating room minutes and a 4% decline in average length of stay.
The increase in patients was accompanied by higher spending, though hospitals managed to do so more efficiently.
Compared to 2024, this year’s first four months brought a 7% rise in total daily expenses, broken down into a 6% labor spend increase and an 8% nonlabor spend increase. On a per adjusted discharge basis, those came in at just a 2% total expense increase, a 1% labor expense increase and a 4% nonlabor expense increase.
From March, daily total expense increased by 3%, labor expense by 1% and nonlabor expense by 4%. Per adjusted discharge, hospitals cut their total spending by 2% and labor spending by 4% while nonlabor stayed flat.
Kaufman Hall, which is owned by healthcare data and improvement company Vizient, releases monthly reports built on operating data from 1,300 nationwide hospitals as collected by Strata Decision Technology.
A similar monthly benchmark released late last week by Strata highlighted April as the 24th consecutive month of year-over-year gross revenue growth alongside volumes gains but undercut the boost by underscoring increased nonlabor spending and relatively flat hospital operating margins compared to March.
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