Hospitals have their best Operational year since the pandemic
  • Feb 02, 2024
  • Black Book Market Research

Hospitals and health systems have started to turn things around since the pandemic and for the year 2023, many health systems closed out the year with margin increases of nearly 15% according to a report issued by Kaufman Hall. 

The hospital systems as a whole have found ways to operate more efficiently in the changing landscape, of which the systems are switching to a more outpatient, friendly system. Hospitals for the most part are now adjusting to how and where they’re delivering services to better meet the demands of the patients. 

The average length of stay dropped slightly throughout the calendar year from 2022 to 2023. The drop in the length of stay is a direct result of the ongoing effort by and large for hospitals to develop clear pathways for discharge. The shift in outpatient care can mainly be attributed to the changes in reimbursement, the reference of the patient and the increased ability to provide quality care in an outpatient setting that is more efficient and affordable for all parties. As a result, outpatient revenue grew significantly, growing more than 40% compared to 2020. 

Hospitals have also found ways to cut their expenses and operate within their means since the pandemic. Many hospitals are now recovering from the cost to maintain a labor force. Throughout the pandemic many hospitals relied on agency workers to help fill in the gaps on their schedules. These agency workers were making a significant amount of money through their respective agencies. As such, the cost for using agency workers was a significant factor for most bottom lines, as there was a fee associated with the use of agency workers. Now, as hospitals recover they are able to hire, train and retain their own staff, the use of agency workers, for the most part are decreasing. 

Hospitals will need to continue to be creative when it comes to operating within their budgets to reach a more sustainable financial security. High operating costs will continue to be a significant concern for the foreseeable future, even though costs have remined relatively steady in their increases throughout the calendar year. The costs for necessities continue to remain high for most hospital systems, such as food and utilities, although they are not increasing at the rate they were following the pandemic. 

The hospital systems as a whole cannot afford to let up on their creative efforts to increase revenue and decrease operating costs. As the landscape continue to shift, so will their diligent efforts and mindful alterations. As such, hospitals are experiencing general improvements across operational and financial measures. 

  • DOWNLOAD THE APP Protection Status