Healthcare Operating Margins Contract for 1st Time Since March

Ongoing increases in expenses were part of the drive behind lower hospital operating margins in July, according to a Syntellis report.

While such margins remained positive, they contracted for the first time since rising into the black in March, per Becker’s. The operating margin median for July was 1.1% compared to 2% in June, but still higher than the March through May period and 2.6 percentage points higher than July 2022.

While overall expenses were up 3.6% on the same period in 2022, labor expenses increased 2.1%. Supplies and drug costs were both up over 5%, the report said.

“While operating margins remain positive, the July results are a stark reminder that hospitals are on unsteady ground as they work to recover from more than a year of negative margins,” said Steve Wasson, executive vice president and general manager for data and intelligence solutions at Syntellis. “Future months will show whether this is just a temporary dip on the path to more stable footing, or the beginning of a backslide into the red.”

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