Healthcare expenses declined in July, but not by enough to offset revenue losses, Kaufman Hall said in its latest National Hospital Flash Report.

Key Takeaways

1. Hospital performance declined on a month-over-month basis in July.
   All volume indicators registered declines this month. However, when compared
   to 2022, there is some slight improvement in operating margins.
2. Outpatient volumes decreased slightly more than inpatient.
   Some of this decline may be attributed to less patients seeking elective procedures in summer.
3. Expenses declined, but not enough to offset revenue losses.
   Labor continues to be the biggest share of hospital expenses, and expenses will likely
   continue to fluctuate due to inflation.
4. Bad debt and charity care rose month-over-month.
   Medicaid eligibility redetermination continues to affect hospitals and patients, with more
   than 30 states disenrolling people in June and July.

Action Steps

In an environment where hospitals continue to feel the effects
of Medicaid disenrollment and labor expenses, those that have
been more successful have made care transition a priority.

Hospitals should consider:

• Starting off right by obtaining the necessary pre-certifications
  and payer authorizations before the patient comes in the
  door, as well as planning for discharge as soon as they are
  admitted.
• Collecting data and using it to inform process improvement.
  Hospitals need to quantify lengths-of-stay and related data,
  and more importantly, use this data to make change.
• Establishing relationships with post-acute care settings and
  having a clear pathway for patients’ post-discharge transition.