Hospital Volumes Dipped in August As Delta Variant Surged
Despite surges in COVID-19 hospitalizations, hospital volumes were down in August, keeping margins down with them.
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By - Hospitals volumes once again declined this summer as coronavirus resurged due to the Delta variant, according to a new report from Kaufman Hall.
The healthcare consulting firm drew on financial data from more than 900 hospitals. The report found that key hospital volume metrics dipped in August 2021—though not as much as declines observed during the initial surge of COVID-19 in the first eight months of 2020.
Adjusted discharges were down by 4.8 percent year-to-date compared to pre-pandemic levels from 2019. Compared to 2020, the metric was actually up by 8.7 percent year-to-date.
Emergency department (ED) visits also took a hit in August 2021, the report showed. The metric was down 11 percent year-to-date compared to pre-pandemic levels and up 7.3 percent year-to-date compared to the first eight months of 2020.
Operating room minutes followed a similar trend, coming in a 1 percent below pre-pandemic levels but 15.1 percent above 2020 levels.
The only hospital volume metric to experience significant increases compared to both periods was average length of stay. The metric was up by 7.9 percent year-to-date compared to 2019 and by 4.5 percent year-to-date compared to 2020. The increase was most pronounced in the South, which saw average length of stay increase by 8 percent and patient days increase by 20.3 percent.
Average length of stay increased as hospitals treated higher acuity cases requiring longer hospital stays. These stays included patients diagnosed with COVID-19. The cases contributed to a rise in hospital revenue, according to Kaufman Hall, with gross operating revenue up 9.6 percent above pre-pandemic levels year-to-date and 16.6 percent above 2020 levels year-to-date, both numbers not taking into account federal aid.
Outpatient revenue saw the greatest increase at 10 percent year-to-date compared to 2019 levels and 20.3 percent year-to-date compared to 2020 levels. Inpatient revenue was just 5.6 percent above 2019 levels year-to-date and 11.8 percent compared to 2020 levels year-to-date.
But these stays will cost hospitals in the long run. A recent American Hospital Association (AHA) report found that hospitals are estimated to lose $54 billion in net income this year largely due to the influx of higher acuity inpatient cases, including COVID-19 patients and people who put off care during the pandemic but whose conditions deteriorated.
In fact, Kaufman Hall reported that despite revenue increases, hospital margins remained down during the August surge of the Delta variant. The median operating margin index according to the consulting firm’s method was just 3.1 percent, not including federal aid from the CARES Act. With the aid, it was 3.9 percent.
Hospital margins were 11.8 percent below pre-pandemic levels. Additionally, the median change in operating margin was down by 2.9 percent compared to pre-pandemic levels, while operating EBITDA margin was down by 6.1 percent year-to-date, the report showed.
Accounting for federal aid, the median change in hospital operating margin index rose by 11.2 percent while median change in EBITDA margin increase by 3.1 percent year-to-date compared to January through August 2019.
Higher expenses also contributed to stymied hospital operating margins, the report stated. Growth in adjusted total and non-labor expenses both exceeded pre-pandemic and 2020 levels.
“Hospitals nationwide have faced significant recent setbacks in the wake of the Delta variant,” Erik Swanson, a senior vice president of Data and Analytics with Kaufman Hall, said in a press release. “COVID-19 rates appear to be tapering in September, but the August data show we are not out of the woods yet, and hospitals face additional uncertainties as we move into the fall and winter.”
