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Kaufman Hall: Hospitals could lose $54B this year due to more expenses, sicker patients

by Robert King | September 21, 2021 

Hospitals across the country are expected to lose an estimated $54 billion in net income throughout 2021 due to higher expenses and fewer outpatient visits, a new hospital industry analysis found.

The analysis, released Tuesday by the American Hospital Association (AHA) and conducted by Kaufman Hall, found that more than a third of hospitals will keep negative operating margins through the end of the year.

“With cases and hospitalizations at elevated levels again due to the rapid spread of the Delta variant, physicians, nurses and other hospital caregivers and personnel are working tirelessly to care for COVID-19 patients and all others who need care,” said AHA President and CEO Rick Pollack in a statement. “At the same time, hospitals are experiencing profound headwinds that will continue throughout the rest of 2021.”

Kaufman’s analysis looks at financial data from 900 hospitals in the first and second quarters, just as the delta variant was taking hold across the country. It makes projections for the rest of the year based on those data.

Hospital margins could potentially be 11% below pre-pandemic levels by the end of the year, but the projections don’t factor in recent spikes in COVID-19 cases due to delta.

“Our projections reflect margin deficits that will inhibit hospitals’ ability to invest in growth or additional community services throughout 2021,” the analysis said.

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Chris J. Stewart

Chris currently serves as President and CEO of Surgio Health. Chris has close to 20 years of healthcare management experience, with an infinity to improve healthcare delivery through the development and implementation of innovative solutions that result in improved efficiencies, reduction of unnecessary financial & clinical variation, and help achieve better patient outcomes. Previously, Chris was assistant vice president and business unit leader for HPG/HCA. He has presented at numerous healthcare forums on topics that include disruptive innovation, physician engagement, shifting reimbursement models, cost per clinical episode and the future of supply chain delivery.

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