Becker's Hospital Review

19 CFO / FINANCE Nonprofit hospitals in these 10 states report highest expenses per inpatient day By Ayla Ellison T he average adjusted expenses per inpatient day for nonprofit hospi- tals in the U.S. was $2,738 in 2019. In one state, those expenses were more than $1,000 higher. Below are the 10 states where nonprof- it hospitals reported the highest adjust- ed expenses per inpatient day in 2019, according to statistics from Kaiser State Health Facts. These figures, which are based on infor- mation from the 2019 American Hospital Association Annual Survey, include all operating and nonoperating expenses for U.S. community hospitals, defined as nonfederal short-term general and other hospitals whose facilities and services are available to the public. The figures are an estimate of the expenses incurred in a day of inpatient care and have been adjusted to reflect an estimate of the vol- ume of outpatient services, according to the Kaiser Family Foundation. 1. California: $4,128 2. Washington: $3,723 3. Oregon: $3,665 4. Wyoming: $3,590 5. District of Columbia: $3,538 6. Utah: $3,363 7. Massachusetts: $3,307 8. Colorado: $3,299 9. Delaware: $3,163 10. New York: $3,058 n S&P: Nonprofit hospitals likely to face 'significant' revenue pressures in 2022 By Alia Paavola A lthough the U.S. nonprofit hospital sector remains stable, these facilities will face operating headwinds as "significant ongoing" expense and revenue pres- sures will likely continue throughout 2022, according to S&P Global Ratings. The top near-term operating risk for nonprofit hospitals is labor because it is the high- est expense category for nonprofit hospitals and minor disruptions can be costly. "Although the healthcare industry has always had periods of staffing challenges, those ignited by the pandemic are more widespread, severe and expensive to address," the report said. In addition to labor, supply inflation will have a dampening effect on margins, according to S&P. Hospitals are stuck paying higher prices for personal protective gear and other in-demand supplies as the COVID-19 pandemic continues. S&P said that depending on the severity of the operating pressures, there could be in- creased stress to the credit quality of organizations with narrow margins or less balance sheet flexibility. Overall, S&P said it expects operating margins to be weaker in 2022 for many provid- ers when compared with 2021. However, the credit rating agency expects many or- ganizations can navigate these challenges because they have healthy balance sheets, could see improved revenue yield, and healthcare services will remain in demand. "S&P Global Ratings maintains its sector view as stable given healthy balance sheets for many providers, effective leadership that has continued to pivot and use data and technology to manage near-term challenges, and our view that demand for services and improved revenue yield will continue to support hospitals, although likely from a new baseline and potentially with some unevenness as COVID-19 variants remain present," S&P said. n US healthcare spending grows 9.7%: 7 things to know By Alia Paavola H ealthcare spending in the U.S. increased 9.7 percent to $4.1 tril- lion, or $12,530 per person, in 2020, largely driven by an infusion of fed- eral money to respond to the COVID-19 pandemic, according to a CMS analysis published Dec. 15, 2021, in Health Affairs. Seven things to know: 1. e growth rate in 2020 was the largest jump recorded since 2002 and was more than double the 4.3 percent growth in healthcare spending seen in 2019. 2. CMS said the overall health spending in 2020 was higher for three main reasons: provider assistance programs like the Provider Relief Fund and Paycheck Pro- tection Program, increased federal public health spending, and growth in federal Medicaid payments. 3. e share of the economy devoted to healthcare spending was 19.7 percent in 2020, compared to 17.6 percent in 2019. 4. Hospital spending grew 6.4 percent, reaching $1.3 trillion in 2020. e growth reflected COVID-19 relief funding and faster increases in Medicaid spending for hospital care. Hospital prices also in- creased 3.2 percent in 2020 compared to 2 percent in 2019. 5. Physician and clinical services spend- ing grew 5.4 percent and reached $809.5 billion in 2020. 6. Retail physician drug expenditures reached $348.4 billion in 2020, represent- ing 3 percent growth. 7. "e substantial growth in healthcare spending was the largest since 2002 and driven by the unprecedented government response to the global pandemic," said Micah Hartman, a statistician in the CMS Office of the Actuary and first author of the article. "Federal spending increased rapidly in 2020 as the government in- creased public health spending to combat the pandemic and provided significant assistance to health care providers." n

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