Potential revenue boost seen in flu stats

Flu activity this season is tracking ahead of previous years—which could mean a jump in patient volume at a time when many systems rely on a winter boost to their bottom lines.

The winter flu season is the biggest seasonal factor for hospital revenue, said Liz Sweeney, an analyst who covers the not-for-profit hospital sector for Standard & Poor's. “That seems to be the strongest driver,” she said.

The Centers for Disease Control and Prevention, which publishes a weekly flu tracker, found that influenza activity has been elevated for four consecutive weeks, and 5.6% of visits to healthcare providers were related to flu-like illness in the week ended Dec. 29.

Last flu season, which was relatively mild, saw a peak of influenza-related healthcare visits of only 2.2%, according to the CDC. In 2009, the year of the H1N1, or swine flu, pandemic, influenza-related visits peaked at 7.7%.

The agency added in a news release that providers are likely to see increased flu volume “for some time.” It noted that 91% of influenza strains identified so far this season have matched the viruses included in the 2012-13 flu vaccine.

Southern, Midwestern and Mid-Atlantic states reported the highest flu levels.

In a note to clients, Frank Morgan, an analyst at RBC Capital Markets, predicted that this year's flu season, which is tracking ahead of previous years and hasn't peaked yet, could bring in higher patient volumes for the first quarter. However, these patient visits can result from non-urgent, low-acuity complaints, and he cautioned that the volume boost might not translate into higher margins.

Sweeney noted that the third quarter tends to be the weakest for many hospitals, when many doctors and patients take their summer breaks. The following two quarters then see a revenue jump—largely driven by winter viruses such as the flu.