What You Should Know:– A new report from Strata Decision Technology reveals mixed signals for the financial health of US hospitals. While operating margins have improved significantly year-over-year, rising drug and supply costs threaten to undermine this progress.– The US hospital sector shows signs of financial recovery, with improved margins and revenue growth. However, rising drug and supply costs pose a significant threat to continued progress. As healthcare leaders navigate this complex landscape, close monitoring of expenses and strategic cost-containment efforts will be crucial for long-term financial stability.Year-to-Date Margins Show ImprovementThe median year-to-date (YTD) operating margin for U.S. hospitals reached 5% in May 2024, a substantial increase compared to just 0.7% in May 2023. This positive trend suggests ongoing financial recovery for the hospital sector.However, a closer look reveals some cause for concern:Modest Month-to-Month Gains: The May margin is only slightly higher than April’s 4.7%, indicating a slow improvement rate.The May margin is only slightly higher than April’s 4.7%, indicating a slow improvement rate

What You Should Know:– U.S. hospitals and health systems continued to experience positive financial performance in April, with patient demand and revenues rising for the 12th consecutive month, according to new data from Strata Decision Technology.– While hospitals and health systems experienced positive financial performance in April, rising expenses remain a concern. Continued monitoring of these trends will be crucial for understanding the overall health of the healthcare industry.Key Findings:12th Consecutive Month of Revenue Growth: Gross hospital revenues saw double-digit increases across both inpatient and outpatient services, marking the 12th consecutive month of year-over-year (YOY) growth. Outpatient revenue led the way with a 15.3% increase, reflecting the ongoing demand for convenient outpatient care.Gross hospital revenues saw double-digit increases across both inpatient and outpatient services, marking the 12th consecutive month of year-over-year (YOY) growth. Outpatient revenue led the way with a 15.3% increase, reflecting the ongoing demand for convenient outpatient care. Steady Operating Margins: The median hospital operating margin remained stable at 4.7% for a second month, indicating healthy financial performance despite rising expenses.The median hospital operating margin remained stable at 4.7% for a second month, indicating healthy financial performance despite rising expenses

–  Hospitals and health systems nationwide saw a sizable increase in delayed or missing payments in the first quarter, due in part to a recent, large-scale disruption to payment processing services, according to a new report from Strata Decision Technology. – The report, leveraging data from Strata’s extensive healthcare databases, unveils trends impacting hospitals, insurers, and patients alike.Delayed Payments Disrupt Revenue StreamsA significant finding concerns a surge in delayed or missing payments to hospitals. This can be attributed in part to a recent large-scale disruption in payment processing services. The financial impact is substantial, with estimated gaps in expected revenue ranging from 16.5% to 17.9% for the first three months of the year. The report highlights that both the largest and smallest hospitals were most affected.Two-Midnight Rule Expansion: Potential for Higher Inpatient AdmissionsThe report also examines the potential effects of the recently expanded Two-Midnight Rule. This rule requires Medicare Advantage patients to be admitted as inpatients if their care extends beyond two midnights. Analysis suggests this expansion could impact over 20% of Medicare Advantage encounters in 2024