Hospital Finances: April Improvement – Kaufman Hall
- Hospital financial performance showed signs of recovery between January and April, driven by increased patient volumes and service demand, according to a Kaufman Hall report.
- The median operating margin index reached 3% in April,surpassing figures from the previous two months and the 1.5% recorded in May 2024.
- Kaufman Hall's Erik Swanson noted the upward trend in operating room minutes, emergency department visits, and inpatient revenue, signaling strong demand.
Hospital finances are looking up! A new Kaufman Hall report reveals a important enhancement in hospital financial performance between January and April 2025. Operating margins climbed 6% year-to-date—a positive trend fueled by increased patient volumes and demand for services. the median operating margin index reached a healthy 3% in April, a stark contrast to the previous year’s figures, which underscores hospitals becoming more efficient. Shorter average stays and higher discharge rates demonstrate effective patient care management within hospitals, which is a positive sign for the future. These gains are particularly noteworthy considering the financial headwinds hospitals face, including potential Medicaid cuts and fluctuations in supply costs. Read more insights from the latest report to learn about the current market. For more concise details, check News Directory 3. Discover what’s next …
Hospital Financial performance Improves in April 2025
updated June 10, 2025
Hospital financial performance showed signs of recovery between January and April, driven by increased patient volumes and service demand, according to a Kaufman Hall report. The analysis highlights a 6% year-to-date increase in operating margins for 2025.
The median operating margin index reached 3% in April,surpassing figures from the previous two months and the 1.5% recorded in May 2024. Data also indicated a 1% decrease in average length of stay, coupled with a 5% rise in adjusted discharges.
Kaufman Hall’s Erik Swanson noted the upward trend in operating room minutes, emergency department visits, and inpatient revenue, signaling strong demand. He added that shorter average stays suggest hospitals are effectively managing patient care.
“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,” said Erik Swanson, managing director and group leader for data and analytics, at Kaufman Hall.
These improvements occur amid financial uncertainty for hospitals. While some tariffs have been paused, others remain, perhaps increasing supply costs. Providers also face possible Medicaid cuts, which could reduce revenue and increase uncompensated care due to rising numbers of uninsured patients.
In response to these pressures,some systems,including PeaceHealth and NewYork-Presbyterian Health System,have implemented layoffs.
what’s next
Hospitals will need to navigate ongoing financial pressures while maintaining efficient operations to sustain recent gains in financial performance and continue to improve hospital financial performance.