• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer

  • Opinion
  • Health IT
    • Behavioral Health
    • Care Coordination
    • EMR/EHR
    • Interoperability
    • Patient Engagement
    • Population Health Management
    • Revenue Cycle Management
    • Social Determinants of Health
  • Digital Health
    • AI
    • Blockchain
    • Precision Medicine
    • Telehealth
    • Wearables
  • Life Sciences
  • Investments
  • M&A
  • Value-based Care
    • Accountable Care (ACOs)
    • Medicare Advantage

Hospitals See Financial Improvement in 2023, but Challenges Remain

by Fred Pennic 01/30/2024 Leave a Comment

  • LinkedIn
  • Twitter
  • Facebook
  • Email
  • Print

What You Should Know:

– After enduring the worst year in recent memory, 2023 offered hope for hospitals and health systems, with data from Kaufman Hall showcasing general improvement across operational and financial measures.

– The January issue of the National Hospital Flash Report reveals that while the road to full recovery is still under construction, the latest trends suggest a cautiously optimistic outlook.

Financial Rebound, But Pre-Pandemic Levels Still Elusive

The median operating margin index for hospitals reached 2.3% by December, with year-end adjustments adding a slight but welcome boost. Notably, outpatient revenue surged by over 40% compared to 2020, signaling a shift towards alternative care settings. However, Erik Swanson, Kaufman Hall’s senior vice president of Data and Analytics, cautions that “today’s care and business models look very different.”

Length of Stay Seesaw: From Reduction to Potential Rebound?

The average length of stay declined as hospitals prioritized patient discharge efficiency. However, this trend might see a reversal as lower acuity cases increasingly gravitate towards outpatient settings. This shift, while potentially cost-efficient, requires hospitals to adapt their service models and infrastructure accordingly.

Provider Productivity Soars, But Expenses Follow Suit

While provider productivity is on the rise, expenses are outpacing revenue growth. The median investment/subsidy per provider jumped to $225,685, primarily driven by a 9% increase in physician compensation. Interestingly, the data highlights the growing importance of advanced practice providers (APPs), with hospitals employing APPs making up 38.1% of the total workforce.

Future Outlook for 2024

Kaufman Hall experts emphasize the need for hospitals to rethink physician employment models and find ways to reduce reliance on subsidies. Adapting to changing patient preferences and embracing outpatient care models will be crucial for long-term success. Matthew Bates, Managing Director at Kaufman Hall, emphasizes the need for hospitals to “reconsider whether subsidizing physicians is a sustainable financial future.” He encourages organizations to critically evaluate their physician employment model and link it to long-term financial strategies.

Report Background/Methodology

The National Hospital Flash Report draws on data from more than 1,300 hospitals from Syntellis Performance Solutions. The Physician Flash Report draws on data based on more than 200,000 providers, also from Syntellis.

  • LinkedIn
  • Twitter
  • Facebook
  • Email
  • Print

Tap Native

Get in-depth healthcare technology analysis and commentary delivered straight to your email weekly

Reader Interactions

Primary Sidebar

Subscribe to HIT Consultant

Latest insightful articles delivered straight to your inbox weekly.

Submit a Tip or Pitch

Featured Insights

Digital Health Funding Q3 2025: Choppy Undercurrents Beneath a Steady Surface

Featured Interview

ConcertAI VP Shares View on AI Hallucinations and the Fabricated Data Crisis in Scientific Publishing

Most-Read

Qualtrics Acquires Press Ganey Forsta for $6.75B to Create the Most Comprehensive AI Experience Platform

Qualtrics Acquires Press Ganey Forsta for $6.75B to Create the Most Comprehensive AI Experience Platform

Pfizer and Trump Administration Announce Landmark Agreement to Lower Drug Costs

Pfizer and Trump Administration Announce Landmark Agreement to Lower Drug Costs

KLAS Report: Epic's Native Ambient Speech Tool Reshapes Customer AI Strategies

KLAS Report: Epic’s Native Ambient Speech Tool Reshapes Customer AI Strategies

Epic Unveils MyChart Central and New APIs to Advance Interoperability at Open@Epic

Epic Outlines Roadmap for Next-Generation Data Sharing at Open@Epic

Epic Launches Comet: A New AI Platform to Predict Patient Health Journeys

Epic Launches Comet: A New AI Platform to Predict Patient Health Journeys

RevSpring to Acquire Kyruus Health, Creating a Unified Patient Experience

RevSpring to Acquire Kyruus Health, Creating a Unified Patient Experience

Oracle Confirms Layoffs in Kansas City

Oracle Confirms Layoffs in Kansas City

Philips Future Health Index 2025: AI and Digital Tech Can Help Solve Cardiac Care Crisis

Philips Future Health Index 2025: AI and Digital Tech Can Help Solve Cardiac Care Crisis

Optain Health Secures $26M to Advance AI-Powered Retinal Screening

Optain Health Secures $26M for AI-Powered Retinal Screening

Sutter Health and Epic Launch "Sutter Sync" to Optimize Remote Chronic Care

Sutter Health and Epic Launch “Sutter Sync” to Optimize Remote Chronic Care

Secondary Sidebar

Footer

Company

  • About Us
  • Advertise with Us
  • Reprints and Permissions
  • Op-Ed Submission Guidelines
  • Contact
  • Subscribe

Editorial Coverage

  • Opinion
  • Health IT
    • Care Coordination
    • EMR/EHR
    • Interoperability
    • Population Health Management
    • Revenue Cycle Management
  • Digital Health
    • Artificial Intelligence
    • Blockchain Tech
    • Precision Medicine
    • Telehealth
    • Wearables
  • Startups
  • Value-Based Care
    • Accountable Care
    • Medicare Advantage

Connect

Subscribe to HIT Consultant Media

Latest insightful articles delivered straight to your inbox weekly

Copyright © 2025. HIT Consultant Media. All Rights Reserved. Privacy Policy |