The financial stability that was detected throughout last year has been affirmed by the latest findings from Kaufman Hall, the Chicago-based consulting and advisory firm.
As noted in a press release posted to the organization’s website on Feb. 5, “Hospitals’ financial and operational performance showed continued stability in 2024, with increased outpatient revenue compared to 2023 and fewer patient observation days, the number of days patients spend under hospital monitoring without formal admission. While expenses continued to rise throughout 2024, they did not outpace inflation on a volume-adjusted basis. These are the main findings of the National Hospital Flash Report from Kaufman Hall, a Vizient company.”
The press release went on to note that “The report also finds that bad debt and the volume of charity care provided by hospitals in 2024 increased. Experts at Kaufman Hall say this may be due to fewer people being enrolled in public insurance programs like Medicaid as pandemic-era coverage protections expired, as well as increased rates of coverage denials by insurers.
“While it’s encouraging to see continued stability in hospitals’ financial well-being over the past 12 months, historically slim margins indicate hospitals are not yet in a fully sustainable position,” said Erik Swanson, Senior Vice President and Data and Analytics Group Leader with Kaufman Hall, said in a statement contained in the press release. “The uptick in bad debt and levels of uncompensated care provided by hospitals will be an indicator to monitor over the next several months. On the workforce front, we continue to see a competitive and tight labor market across the healthcare sector.”
The press release went on to note that, “According to Kaufman Hall’s quarterly Physician Flash Report, physician payment and productivity also rose in the final quarter of 2024. The median subsidy paid by hospitals to practice groups reached $306,792 per employed physician. Experts note that while physician output and productivity rose, reimbursement remains a challenge and an indication that traditional fee-for-service models may not be sustainable.”
“This data shows us that, while physician payment is rising, providers are working more while generating less revenue per unit of work,” Matthew Bates, Managing Director and Physician Enterprise Service Line Leader with Kaufman Hall, said in a statement contained in the press release. “Looking ahead, alternative risk-sharing structures like value-based models have shown promise—particularly in primary care—in increasing revenue without solely relying on greater output from doctors.”
And, the press release noted, “The data comes from Kaufman Hall’s National Hospital Flash Report, which draws on data from more than 1,300 hospitals from Strata Decision Technology, LLC. The Physician Flash Report draws on data based on more than 200,000 providers, also from Strata.”
Summarizing Kaufman Hall’s findings from across the entirety of 2024, the report noted the following “key takeaways:
1. Hospital performance improved compared to 2023. Outpatient revenue increased and over the year, there was a decrease in patient observation days.
2. Expenses rose in 2024 but did not outpace inflation on a volume-adjusted basis. The workforce continues to be competitive.
3. Bad debt and charity care rose in 2024. This trend may reflect the continued Medicaid redetermination process and increase in the rate of payer denials.”
The full report can be accessed here.
