Hospitals' operating margins continued to plummet in April as COVID-19 sunk revenues, new data show.
Hospitals' median operating margin fell to negative 29% in April, dropping 282% relative to last year, according to Kaufman Hall's analysis of around 800 hospitals.
As hospitals delayed non-urgent procedures to manage COVID-19 cases, operating room minutes decreased 61%—more than triple the decline seen in March. That contributed to a 30% decline in total gross revenue, with outpatient revenues taking the biggest hit, falling 50% year over year.
"To have a negative 29% operating margin is the lowest ever by a huge margin," said James Blake, author of the report and managing director of Kaufman Hall.
Discharges fell 30% relative to last year while emergency department visits dropped 43%, stoking providers' concerns that patients, particularly those with serious and chronic conditions, are putting off essential treatment. Estimates range from around 1 in 3 patients to up to 41% who have delayed care during the pandemic.
"As consumer behavior has changed, that has dramatically driven down ED visits as well as any admission through the ED or traditional channels. That combined with all of the outpatient activities that have fallen precipitously has been a double whammy from a revenue basis," said Erik Swanson, vice president at Kaufman Hall.
Those who delay care are worried about contracting the virus or taxing the already stretched healthcare system, or can't afford it. Millions have lost their employer-sponsored coverage as the unemployment rate hovers around 15%, some of whom will qualify for Medicaid.