Year-over-year inpatient and outpatient revenues also increased in November. Inpatient revenue increased by 5% while outpatient revenue increased by 9%.

At the same time, total expenses adjusted discharges decreased, and revenue per adjusted discharge increased — both of which Kaufman Hall said were signs of financial recovery for hospitals. Average length of stay also declined, which suggests a shift toward more normal patient acuity.

Hospitals that have adopted value-based and bundled payment models will see further benefits from this trend toward more normal patient acuity as they transition and provide care at appropriate clinical settings.

Commentary

Although hospitals are more financially stable than they were before, margins still below pre-pandemic levels in 2020 and 2021. According to Erik Swanson, SVP of data and analytics at Kaufman Hall, "hospitals should take advantage of the relative stability and re-embrace strategic growth if they hope to see continued success in 2024."

"Growth strategies may vary from hospital to hospital, but all leaders should ensure that they are supporting goals beyond just profitability and scale, including business model transformation and diversification," Swanson said.

In the report, Kaufman Hall outlined four action steps for organizations to take in 2024 and beyond:

1. Reinvest in strategic growth to sustain their mission.
2. Work hard and have discipline, persistence, and flexibility to achieve meaningful growth.
3. Depending on your situation and market outlook, consider pursuing interrelated "growth vectors."
4. Ask yourself three questions: 1) Is our market large enough? 2) Are we essential to our market? And 3) How do we strengthen our competitive position?

(Bettelheim, Axios, 1/10; Commins, HealthLeaders, 1/9; Kaufman Hall December 2023 National Hospital Flash Report, accessed 1/10)

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