The American hospital industry has recently received its own report card, which has acted as a measure of its own performance from the beginning of this year through April. And, from a financial standpoint, we’re looking at a nice GPA.
Health consulting conglomerate Kaufman Hall undertook a review of the financial performance of U.S. hospitals over the first four months of 2025 and determined that there was overall improvement. This was due largely to a rise in patient volumes, along with an increased demand for healthcare services. Here is a snapshot of some of the more specific findings:
- Year-to-date operating margins were 6% higher through April over against the same time period last year
- During the first four months of 2025, the average length of stay fell, year over year
- During the same period, adjusted discharges per calendar day rose, indicating the efficient processing of patients through the system
- Monthly median operating margins were at 3% in April, higher than the previous two months
- Average length of stay was down 1% compared with the same period last year
- Adjusted discharges increased 5%
- Operating room minutes per calendar day were up 1% year over year, while emergency department visits per calendar day rose 3%
According to Erik Swanson, managing director and group leader for data and analytics at Kaufman Hall:
Operating room minutes, ED visits, and inpatient revenue are trending upward, demonstrating a strong demand for services. A decline in average length of stay indicates that hospitals are triaging, treating and discharging patients efficiently and appropriately.
This positive report covering the first four months of the year may be why so many health-related jobs were added in the fifth month of 2025. According to a June report released by the U.S. Bureau of Labor Statistics, the healthcare industry added 62,000 jobs in May, exceeding the sector’s average monthly gain of 44,000 workers over the past year. This includes 30,000 hospital jobs, along with 29,000 ambulatory positions, being added in May. This would tend to indicate a continuing increase in demand for healthcare services by the broader population.
So, overall, we’re seeing passing grades for the first part of 2025. But there is always another report card coming, and those ahead will no doubt reflect the effect of the huge spending bill recently signed into law. How will changes to the Medicaid program and the Affordable Care Act provisions in the “Big, Beautiful Bill” affect hospitals’ bottom lines over the next several months? We’ll have to examine that report card when it comes out later this year.