Medicare beneficiaries are driving a surge in demand for medical care, keeping Americans in doctor’s offices and straining the capacity of healthcare providers. This trend is having a significant impact on the financial reports of nonprofit health systems in the first quarter of 2024.
In fact, a recent analysis of 20 large nonprofit health systems found that all but four reported higher operating and net margins in the first three months of 2024 compared to the same period in 2023. Hospitals are seeing an increase in patient volumes and are reducing their reliance on expensive contract labor used during the pandemic. They are also experiencing strong investment gains on the non-operating side.
To improve their financial performance, hospitals have implemented various strategies over the years. Rick Kes, a health care partner with tax and consulting firm RSM, mentions that hospitals have been fighting insurance denials and negotiating better deals with vendors for essential supplies such as drugs and medical devices.
Overall, healthcare providers are focusing on increasing patient volumes and implementing cost-saving measures to enhance their financial performance. The industry is adapting to the changing landscape as the demand for medical care continues to grow, especially among Medicare beneficiaries.
