Dive Brief:
Hospitals’ financial performance improved between January and April due to an uptick in patient volumes and increased demand for services, according to a report published last week by Kaufman Hall.
The sector’s year-to-date operating margin was 6% higher in 2025 compared with the same time last year, the consultancy found.
During the first four months of the year, average length of stay fell year over year while adjusted discharges per calendar day rose, signaling patients are moving through health systems efficiently, Kaufman Hall said.
Dive Insight:
The monthly median operating margin index was 3% in April, higher than the previous two months and the 1.5% reported in May 2024, according to the report.
Average length of stay was down 1% compared with the same period last year, while adjusted discharges increased 5%. Operating room minutes per calendar day were also up 1% year over year, while emergency department visits per calendar day rose 3%.
“Operating room minutes, ED visits, and inpatient revenue are trending upward, demonstrating a strong demand for services. A decline in average length of stay indicates that hospitals are triaging, treating, and discharging patients efficiently and appropriately,” Erik Swanson, managing director and group leader for data and analytics, at Kaufman Hall, said in a statement.
The analysis comes as hospitals face uncertainty and new financial pressures. Tariffs announced by President Donald Trump in early April sent the markets scrambling, hitting nonprofits’ investment portfolios.
And though the administration has paused some tariffs, others remain in place — raising concerns the policy could increase hospitals’ supply costs.
Providers are also bracing for potential cuts to Medicaid currently under consideration in Congress. If the reconciliation bill passes, the healthcare provisions could slam provider revenue as they grapple with increased uncompensated care due to the rising number of uninsured patients.
Some health systems, like PeaceHealth and NewYork-Presbyterian Health System, have conducted layoffs amid the macroeconomic uncertainty.
