Hospitals’ Operating Margins Plummet In Hint Of Prolonged Financial Decline From Battling COVID-19
"We anticipate April will be significantly worse, and at this point, no one knows how long hospitals will continue on their current path," said James Blake, author of a new report analyzing hospital revenue.
COVID-19 Pushes Median Hospital Operating Margins To -8%
Hospitals' median operating margins fell 150% to negative 8% in March, dropping 14 percentage points relative to last year, according to a new report from Kaufman Hall. A 20% decline in operating room minutes, in part, sunk revenue by 13% as providers postponed elective procedures like non-urgent heart surgeries and joint replacements to free capacity for coronavirus patients. (Kacik, 4/21)
In other news from the industry —
With Expenses Up And Volumes Way Down, HCA Looks To 'Reboot'
The stranglehold COVID-19 put on HCA Healthcare's volumes starting March 15 has only worsened in April, with outpatient surgeries down 70% year-over-year so far. Leaders with the Nashville-based hospital chain said on an earnings call Tuesday they view the first quarter, which ended March 31, in two distinct phases: pre- and post-COVID-19. All key volume indicators were on the upswing from January 1 through March 15. After that, all bets were off. (Bannow, 4/21)
Federal Appeals Court Upholds DSH Payment Rule
A federal appeals court ruled Monday that the CMS can include Medicare and commercial payments in a hospital's disproportionate-share payment limit calculation, a move that would lower supplemental payments to hospitals that care for low-income and uninsured people. The three-judge panel for the U.S. Court of Appeals for the Fifth Circuit found that the CMS acted within its rights when it created the 2017 rule, overturning a lower-court decision. (Brady, 4/21)
Health Insurer CEOs Saw Pay Bumps In 2019
The CEOs of the largest publicly traded health insurers received more in total compensation in 2019 than they did the year before as nearly all of their companies grew profits and revenue. David Wichmann, the CEO of the most profitable health insurer UnitedHealth Group, made $18.9 million in total pay last year, a 4.3% increase over the year before, according to the company's annual proxy statement filed with the U.S. Securities and Exchange Commission. (Livingston, 4/21)