Becker's Hospital Review

8 CFO / FINANCE Hospitals suffer worst financial year since the pandemic By Molly Gamble E leventh-hour financial improvements were not enough for U.S. hospitals, making 2022 "the worst financial year for hospitals and health systems since the start of the COVID-19 pandemic," according to Kaufman Hall. e declaration is hardly a surprise as hospitals' median monthly margins lingered in the red throughout the first 11 months of 2022, starting with the -3.4 percent recorded in January, driven by the omicron surge. December was the only month where hospitals realized a positive year-to-date operating margin at 0.2 percent, according to Kaufman Hall's latest "National Flash Hospital Report" — based on data from more than 900 hospitals. Approximately half of U.S. hospitals finished the year with a negative margin, Kaufman Hall reported. Labor expenses were a constant source of pressure throughout the year, with both a competitive labor market and greater reliance on more expensive contract labor to meet staffing demands driving hospital expenses that their bottom lines could not outdo, even with increased patient volumes. Hospital labor expenses grew by 2 percent from November to December, and total direct expense per provider FTE grew to $592,430 in the fourth quarter of 2022, a 5 percent increase compared to the fourth quarter of 2021. "As we saw throughout 2022, the labor market was unkind to hospitals and provider groups," Erik Swanson, senior vice president of data and analytics with Kaufman Hall, said. "Given that labor and non-labor expenses are unlikely to recede in 2023, hospitals can embrace better workforce management strategies and leverage their relationships with post-acute care settings to maximize current patient volume trends." e analysis also found hospitals experienced increased patient volumes, particularly in outpatient settings as the front door of the hospital shied away from the emergency department and toward ambulatory and outpatient surgical settings. e net patient revenue per provider FTE rose to $397,493, an 8 percent increase year over year. "e pandemic fueled a fundamental shi in how patients are choosing to access their routine care," Matthew Bates, managing director and physician enterprise service line lead with Kaufman Hall, said. "Providers are seeing more patients than ever, particularly in primary care settings, and care is moving away from hospitals. Medical groups should seek to improve individual provider productivity and efficiently integrate advanced practice providers to meet the increase in volume and successfully bend the cost curve." n Top 7 billionaires in US healthcare By Kelly Gooch An HCA Healthcare co-founder and shareholder tops the list of billionaires in U.S. healthcare. Here are the top seven U.S. healthcare leaders on the Bloomberg Billionaires Index as of Feb. 21, ranked on descending net worth. 1. Thomas Frist Jr., MD: $22.6 billion Dr. Frist is a co-founder and major shareholder of HCA Healthcare, a for-profit hospital operator based in Nashville, Tenn. HCA operates 182 hospitals and more than 2,300 care sites in 20 states and the United Kingdom. 2. Carl Cook: $10.4 billion Mr. Cook is owner and CEO of Cook Group, a medical device manufacturer based in Bloomington, Ind. 3. Patrick Soon-Shiong, MD: $8.7 billion Dr. Soon-Shiong invented the cancer drug Abraxane. He sold APP Pharmaceuticals to Fresenius Medical Care for $4.6 billion in 2008, and Abraxis BioScience to Celgene for $2.8 billion in 2010. 4. Ronda Stryker: $7.9 billion Ms. Stryker is the director of and the largest individual shareholder in Stryker Corp., a medical equipment company. She owns 6 percent of the company. 5. Li Ge, PhD: $6.4 billion Dr. Ge is chairman and CEO of WuXi AppTec, a a global R&D and manufacturing services company. 6. Reinhold Schmieding: $6.2 billion Mr. Schmieding is the founder and president of Arthrex, a surgical device maker based in Naples, Fla. 7. Pat Stryker: $6.2 billion Ms. Stryker is a shareholder of Stryker Corp., a medical equipment company founded by her grandfather. n "e pandemic fueled a fundamental shi in how patients are choosing to access their routine care." — Matthew Bates, Matthew Bates, managing director and physician enterprise service line lead with Kaufman Hall

• Cover