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Feature Story: Providers are facing post-pandemic challenges

Advisory Board shares insights during Cushman & Wakefield webinar

By John B. Mugford

Patient volumes have rebounded, but increasing costs and tightening margins are plaguing the healthcare industry, according to a recent Advisory Board presentation during a webinar sponsored by Cushman & Wakefield. (Slide courtesy of Cushman & Wakefield)

Although a vast majority – 92 percent, in fact – of health systems nationwide report that their patient volumes have returned to near pre-pandemic levels, this does not mean they are out of the woods financially.

That’s because expenses, especially those involving paying the people who work for them, have risen dramatically – an increase of about $1,500, or 37 percent, per hospital discharge from 2019 to March of this year, according to information presented by Washington, D.C.-based Advisory Board, a healthcare advisory firm and a subsidiary of Eden Prairie, Minn.-based Optum.

With expenses on the rise, according to Advisory Board information, 69 percent of responding health system strategic planners have reported that their operating margins are below pre-pandemic levels.

“Right now the industry is dominated by increasing costs and tightening margins,” said David Porter, executive partner with Advisory Board. “We’ve seen close to a $1,500 increase in labor expense per adjusted discharge, and that doesn’t take into account the overall increases we’ve seen in capital expenses and pharmacy spend. So (there are) a lot of very serious challenges facing our healthcare ecosystem.”

Mr. Porter made these comments and shared a wide array of data reflecting what health systems are experiencing during a recent webinar presented by the Healthcare Advisory Practice with Cushman & Wakefield Inc. (NYSE: CWK). Hosting the Sept. 8 event were Cushman’s Lorie Damon, executive managing director, and Jennifer Seiler, managing director.

The webinar was titled “State of the Healthcare Industry: Planning for 2023 and Beyond. Guideposts for strategically reshaping the industry.”

He started the presentation by saying,

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