June 2018
Revenue
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National Revenue Observations
In May, revenue per adjusted discharge declined slightly and posted below budget nationally as a result of the increased shift to outpatient care, which impacted smaller organizations especially heavily. Decreased reimbursement per case necessitates that hospitals develop the ability to better adjust operations in light of continuing revenue pressures. As more payers move to per-case reimbursement, hospitals must focus attention on and closely monitor net patient service revenue (NPSR) per case rather than per adjusted patient day, the more traditional metric. However, NPSR per adjusted patient day does remain a valid metric and provides insight into how an organization may be managing patient throughput and LOS. Nationally, revenues per adjusted discharge have declined year-over-year, and hospitals are struggling to achieve NPSR budgets. This trend is reflected in this month’s performance. Leaders should closely analyze changes in payer and service mix, which are key drivers of these metrics and for overall organizational operating margins. The ability to better forecast and budget for revenue swings is imperative. All regions and hospital sizes continued to see an increase in year-over-year growth of both inpatient and outpatient volumes. While growth in outpatient volumes and revenues traditionally translates to a positive financial return for health systems, acute hospitals also typically face tremendous competition from other providers, including physicians and for-profits, and can thus be vulnerable to significant drops in outpatient revenue and profitability when new market service options open.
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National Observations
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