Q2 2021 Report Shows Increase in Oregon Hospital Revenue, Spending and Utilization – State of Reform

Apprise Health Insights, an affiliate of the Oregon Association of Hospitals and Health Systems (OAHHS), has released its Second Quarter 2021 Financial Usage and Analysis last Thursday, outlining hospital finances and capacity in the second quarter of 2021 and current trends in Oregon. The data shows improvement in median and total operating margins, but is associated with significant increases in capacity issues.

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In the report, net patient income (NPR) continues to lag Oregon hospitals’ total operating expenses (TOE) for the fourth consecutive quarter. However, the gap between income and expenditure narrowed in the second quarter.

NPR was up 8.3% from Q1 2021 and PET increased by 5.4% over the same period. In the second quarter, the NPR was $3.81 billion while the TOE was $3.72 billion.

However, high labor costs continue to be a threat to spending and are a major contributor to the 8.3% rise in spending, said OAHHS. Labor costs have risen 20% over the past three years as hospitals continue to report staffing shortages due to burnout, illness and stress.

OAHHS said many hospitals in Oregon have been successful in recruiting thanks to incentives such as higher salaries and signing bonuses, which further burden expenses. OAHHS said:

“While [increasing hospital stays] contribute to increased income, any gain is offset by higher healthcare costs for treating patients with more serious illnesses. »

The increase in income and expenditure is due to greater utilization of hospitals, including more patients with longer stays. Statewide inpatient, outpatient and emergency room (ER) visits increased significantly in the second quarter compared to Q1.

Image: Apprise Health Insights

ER visits increased the most in Q1 and increased by more than 16% – Q1 showed ER visits at -19.5% since Q3 2018. Total outpatient visits also increased by about 10%.

Hospitals are also experiencing longer lengths of stay for hospitalized cases, including patients with COVID-19. The average length of stay fell from 4.7 days in 2019 to 5.2 days in the first six months of 2021. Emergency room boarding – stays longer than six hours – also increased by 5% between the first and the second quarter and saw an overall increase of 15% between December 2020 and June 2021.

Andy Van Pelt, CEO of Apprise Health Insights, expects these trends to worsen in the next quarter with the Delta variant broke records for COVID-19 cases and hospitalizations during the summer. Throughout the third quarter, hospitals reported bed shortages, postponement of elective care and limited community placements after discharge. Shovel said:

“The data tells the story of our overstretched hospital system, which has been pushed to breaking point by the recent surge. Financial pressure from rising labor costs and falling net patient incomes adds to the stress of staffing shortages. We expect these trends to continue in the next quarterly reporting period.”

However, median operating margins and median total margins both improved in the second quarter after declining for two consecutive quarters before Q2.

Image: Apprise Health Insights

The median total margin increased by more than 5% between Q1 and Q2. Federal funding for the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) continues to appear on state hospital balance sheets.