Medical, Lab & IT Equipment Benchmarking & Analytics

Medical, Lab & IT Equipment Benchmarking & Analytics

October 17, 2023

Blog

As Hospital Margins Recover, Seize the Opportunity to Re-Invest

Hospitals nationwide are starting to see a glimmer of financial stability after grappling with the tumultuous challenges of the COVID-19 pandemic. According to the latest report from Kaufman Hall, hospitals experienced an encouraging 1.1 percent uptick in operating margins in August, driven by increased revenue and a decrease in contract labor utilization. While these margins are still below historic levels, the sector is displaying a more consistent trend of positive margins in 2023, indicating a gradual return to normalcy.

This stabilization is seen as an opportunity for hospitals to refocus on strategic planning efforts, such as capital investments, to remain competitive and seize essential opportunities.

Chart showing hospital operating margins month-over-month for 2023

Factors contributing to financial recovery

One notable aspect of the financial recovery is the rise in daily net operating revenue, which surged by 8% from July to August and 6% year-over-year. Outpatient settings led the way with a 12% month-over-month gain, demonstrating that patients are increasingly returning for non-emergency care. This improvement in revenue was accompanied by a reduction in bad debt and charity care metrics, providing further reassurance of hospitals’ financial well-being.

Another significant development is the decline in the average length of stay, which dropped by 4% month-over-month. This shift indicates that patients are resuming more normal patterns of accessing care, contributing to the overall efficiency of hospital operations. While daily total expenses increased by 4% month-over-month, the higher patient volumes and reduced stays resulted in a 5% month-over-month decline in total expenses per adjusted discharge. These improvements in both revenue and expenses offer hospitals a valuable window of opportunity to re-engage in strategic financial and capital planning processes.

Reinvigorate strategic planning efforts to remain competitive

The healthcare sector’s journey toward financial stability is showing promising signs of progress. Hospitals are encouraged to capitalize on this relative stabilization by focusing on strategic planning and adaptability to secure their long-term relevance and viability within their communities and the broader healthcare industry.

Miga Solutions empowers hospitals to optimize the procurement process with better information. Learn about our powerful benchmarking and analytics solutions that let you navigate the market with ease while saving on medical, lab, and IT equipment costs.

 

 

Know the right price.

And get it.

Having the right information saves hospitals time and money on medical equipment lifecycle costs.

Scott Bosch

Manager of Clinical Engineering

Park Nicollet Health Services

“The groups responsible for managing technology in our healthcare organization need data and analysis to manage costs and make informed decisions. Miga’s EVMS platform is an important and valuable resource that helps us make the right decisions for both our clinical priorities and budget.”

Matt Werder

Chief Technology Officer

Hennepin County Medical Center

“Miga’s data is key to helping us be good financial stewards and validates we are using our resources wisely. The market intelligence provided by Miga’s EVMS platform has allowed us to save substantial amounts of money.”

"Miga’s ability to match equipment donated by their customers with the needs of our medical projects has been a most valuable and welcomed resource."

Jim Tierney

CEO

Suburban Radiology

“Miga’s data, analysis and expertise – in particular related to the fair market value of clinical equipment – is a critical resource we need to support strategic acquisitions, divestitures and joint ventures.”

Eric Hoag

Director, Corporate Strategy & Development

Allina Hospitals and Clinics

“Miga’s proprietary data and expertise was critical to our ability to close an acquisition deal quickly and with a high level of confidence in our valuation.”

Bill Barta

Corporate Director, System Imaging

Fairview Health Systems

“Miga’s objective information-based approach and understanding of the needs of hospitals makes them a valuable resource and helps us make the most cost effective spending decisions.”

Matt Blashill

Enterprise Director of Supply Chain

Lake Region Healthcare

"There’s a personal touch that sets Miga apart from their competitors. They don’t just offer great insights. They always take the time to provide additional analysis that is meaningful and actionable."

Dan Bazinet

Director of Clinical Engineering

Southcoast Health

“In all my years in health care, I’ve used a lot of benchmarking tools. Most simply repeat information passed along from others; Miga’s information tells me what’s really happening.”

COO

Community Hospital

"Miga's negotiating skills save us time and money. And their unique understanding of the market means we’re always playing from a position of strength."

Supply Chain Director

Regional Healthcare System

“All suppliers claim to have excellent customer service. Miga actually walks the talk and always has our best interest at heart. We love working with them."