Blog | Healthcare Business Trends

Newly released financial data show pandemic-related challenges intensifying for hospitals

Blog | Healthcare Business Trends

Newly released financial data show pandemic-related challenges intensifying for hospitals

Revenue bumps over the last two years haven’t been a match for soaring expenses.

The COVID-19 pandemic remained a financial drag on hospitals at the end of its second calendar year, according to new data from Syntellis Performance Solutions.

Drawing on data from more than 500 unique departments across more than 1,000 hospitals, Syntellis reported that issues with expenses and unstable volumes hampered hospitals as 2021 drew to a close.

Even as overall volumes were down compared with pre-pandemic times, the healthcare system dealt with an onslaught of omicron cases. For example, urgent care visits were up 37% compared with December 2020 — which itself was part of a major surge in cases — while pediatric ICU patient days were up 35%.

Yet adjusted discharges in December were 4.7% below pre-pandemic levels, and ED visits were 8% lower in 2021 than in 2019. Such declines "have implications for other hospital departments, which typically see some patient flow from the ED,” the report notes.

The case mix changes brought on by the pandemic have helped one side of hospitals’ income statements. Revenues rose by double digits in both inpatient and outpatient settings between December 2019 and December 2021, while inpatient revenue crept up and outpatient revenue jumped by more than 14% relative to December 2020.

Expenses remain a major drag

Even with the revenue bounces, hospital operating margins were 16.5% lower than in December 2019 when discounting funding through the CARES Act (i.e., the Provider Relief Fund and Paycheck Protection Program).

Expenses were the obvious factor, even more so than during the first year of the pandemic. Compared with 2020, hospitals faced notably higher clinical labor expenses. For example, hourly rates rose by 12.3% for contract RNs year-over-year and by 6.7% for ICU RNs, 6.6% for ED RNs and 5.1% for respiratory therapists on an annualized basis.

The median hourly rate for contract RNs was $71, actually down from $82 in October and $99 in November. In December 2020, the rate was $63.

With wages on the rise, labor expense per adjusted discharge was 26.8% higher than in December 2019. Non-labor expenses were 24.5% higher, reflecting prices of supplies.

But there’s little doubt that the biggest area of concern for the industry is workforce-related.

“Regardless of how well systems are managing their employees’ worked hours versus volume, attrition and heavy use of agency staff will add 30%-plus cost to the labor expense,” Matthew Thompson, managing director at Huron, said in a Syntellis news release.

“Organizations must understand that employees have options and move to innovative ways to source, grow and retain talent. A measured and dedicated focus on culture will be a must. Nontraditional approaches for recognition and rewarding their employees will become a baseline standard. Forming partnerships and strategies to drive talent to the organization, instead of passively hoping to attract talent, will be critical.”

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (

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