Monthly Healthcare Industry Financial Benchmarks

April’s Hospital, Patient Volumes, and Physician Practice Financial Performance

This report highlights the latest trends in financial performance for U.S. hospitals and physician groups, drawn from monthly data from more than 135,000 physicians and over 1,600 hospitals.

Overview: Healthcare Organizations See Gains Heading Into Q2

Financial performance metrics remained strong for hospitals, health systems, and physician practices nationwide heading into the first month of the second quarter. Highlights from the April data include:

Hospital Performance Benchmarks

The latest benchmarks illustrate the interplay of revenues and expenses on historically tight hospital operating margins.

Operating Margins: Hospital operating margins held steady in April, remaining above 4.5% for a fourth consecutive month. The April median year-to-date (YTD) operating margin was 4.7%, the same as in March.

Looking at how margins have changed over time, however, hospitals saw gains at a national level. The median change in operating margin rose 4.2 percentage points from April 2023 to April 2024, and was up 1.1 percentage point compared to March 2024. The median change in operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin rose 3.5 percentage points YOY and 1.1 percentage point versus the prior month. Hospitals in the South had the biggest increase, with the median change in operating margin up 5.6 percentage points YOY for the month.

Hospital Expenses: Overall hospital expenses continued to rise compared to 2023 levels. Total non-labor expense had the biggest increase at 10.5% from April 2023 to April 2024, driven by sizable YOY increases in supply expense (16.7%) and drugs expense (14.9%). The increases were a return to recent trends after an anomaly in March, when supply expense was essentially flat and drugs expense decreased.

Total labor expense increased 4.1% YOY, while total expense was up 7.4% over the same period. Compared to March 2024, total non-labor expense rose 2%, while total labor expense dropped 2.7% and total expense was essentially flat, down just 0.1%.

Hospitals saw some improvements in volume-adjusted expenses. Total expense per adjusted discharge decreased 2.5% YOY and labor expense per adjusted discharge was down 4.2% YOY. Non-labor expenses, however, rose slightly on an adjusted basis. Non-labor expense per adjusted discharge was up 0.2% YOY and 1.5% from March to April 2024.

Hospital Revenues: Gross hospital revenues had double-digit YOY growth across both inpatient and outpatient categories in April. Outpatient revenue was up 15.3% and inpatient revenue rose 11.7%, pushing overall gross operating revenue up 14.1% YOY. April marked the 12th consecutive month of YOY growth for the three metrics.

Across different regions, YOY gross operating revenue increases ranged from 12.6% for hospitals in the Northeast/Mid-Atlantic to 15.4% for those in the Great Plains. At a national level, outpatient revenue rose 2.8% and gross operating revenue was up 1.2% month-over-month, but inpatient revenue decreased 0.9%. Net patient service revenue (NPSR) per adjusted discharge increased 2.7% YOY and 1.2% month-over-month in April.

Source: Comparative Analytics

Patient Volume Benchmarks

Hospital inpatient and outpatient volumes drawn from analysis of more than 10 million patient visits.

Patient volumes increased across most measures in April at the national level. Outpatient visits had the biggest increases, up 12.9% YOY and 4.6% versus the prior month. Healthcare organizations in the South and the Midwest had the biggest YOY growth in outpatient visits at 15.4% and 14%, respectively.

Inpatient admissions rose 9.7% YOY for hospitals nationwide and were flat month-over-month. Compared to April 2022, inpatient admissions rose 13.8%, due in part to the ongoing effects of January’s expansion of the Two-Midnight Rule to Medicare Advantage patients. Both emergency and observation visits increased YOY but decreased from March to April 2024. Emergency visits rose 3.3% YOY and dropped 3.9% month-over-month, and observation visits were up 0.8% YOY but down 2.7% versus March 2024.

Patient volumes decreased across most service lines YOY, according to the latest data from March. Looking at both inpatient and outpatient volumes, breast health had the biggest YOY decrease at 11.2%. Infectious disease and allergy & immunology were the only two service lines to see YOY increases for the month, at 8.9% and 1.5%, respectively. By procedure, outpatient computed tomography (CT) scans had the biggest YOY decrease at 16.3% while outpatient positron emission tomography (PET) imaging had the only YOY increase at 3.8%.

Children’s hospital volumes increased across most metrics compared to April 2023, a reversal from the prior month’s trends. Inpatient admissions rose 4.3%, outpatient visits jumped 6.8%, observation visits increased 4.3%, and emergency visits were up 1.2%. 

Source: StrataSphere Research Report: National Patient and Procedure Volume TrackerTM, Data as of April 30, 2024.
*Note: The Leap Year contributed to the sizable increase in inpatient admissions in February 2024, which added an extra day of admissions compared to February 2022. 

Physician Practice Benchmarks 

A look at last month’s key performance indicators from more than 10,000 physician practices.

Physician practices across the country continued to see expenses climb in April. The median, total direct expense per physician full-time equivalent (FTE) reached $1.05 million for April annualized. That represents an 11.4% increase from 2023 and an 18.7% jump from 2022. 

The high expenses continued to drive up the level of investment needed to support physician practice operations. The median investment per physician FTE was $304,752 for the month (annualized), up 6.8% from 2023 and 11.1% from 2022. 

Physician revenues remained on the rise. The annualized, median net revenue per physician FTE was $725,614 for April, representing an increase of 13.4% from 2023 and 22.2% from 2022. Higher physician productivity — measured as physician work relative value units (wRVUs) per FTE — likely contributed to the revenue increases as patient demand increased. The annualized metric rose to 6,350.95 for the month, up 9% from the previous year and up 13.9% from 2022. At the same time, support staff FTEs per 10,000 wRVUs — a measure of staffing levels and productivity — decreased 4.7% from 2023 and 6.2% from 2022 to 2.95 for April annualized.