Report On Business® Roundup: December Hospital PMI®
The most recent Hospital ISM® Report On Business® data, released on Tuesday, was described as “the most typical December to be found” by Nancy LeMaster, MBA, Chair of the Institute for Supply Management® Hospital Business Survey Committee.
That said, what has become typical for U.S. hospitals and other health-care providers in the post-coronavirus pandemic era comes with its share of challenges. The Hospital PMI® reading of 62.5 percent reflected robust patient volumes and business activity, but continuing issues with employment, prices, product shortages — and now, Medicare reimbursement cuts — are creating “a lot of anxiety as we start 2024,” LeMaster told a conference call of reporters.
“I guess the best way to describe it would be that there’s some level of frustration,” she said. “There’s not a clear path for controlling some of those variables, and some hospitals are struggling because it’s something they’ve never faced before.”
Hospital @ISM® Report On Business®: #COVID19, seasonal respiratory cases and elective procedures helped elevate patient volumes — as well as the PMI®, which increased to 62.5% — in December. Also, #inflation remained a concern. https://t.co/2LGlLU7TlM #ISMPMI #economy #healthcare
— Dan Zeiger (@ZeigerDan) January 9, 2024
The good news is that facilities in general were not overwhelmed by the December crush of COVID-19 and seasonal respiratory cases, although hospital mask mandates were reinstated in multiple states. Also, many consumers scheduled elective procedures before insurance deductibles reset for the new year.
The Business Activity Index registered above 70 percent, just 1 percentage point below its all-time high, and the New Orders Index was north of 60 percent. And with the Employment Index in strong expansion territory, staffing wasn’t a paramount concern.
“There was a very strong volume of elective procedures, which is now the norm in the fourth quarter of the year,” LeMaster said. “The increases in the respiratory viruses — flu, COVID-19 and especially RSV (respiratory syncytial virus), which was very high in children’s hospitals — was a concern but did not cause strain on capacity.
“Hospitals are still not hiring as much as they’d like, but clinical position levels remained strong, so staffing was adequate in December to manage the volumes.”
Product shortages remain a top-of-mind concern, exacerbated by (1) the U.S. Food and Drug Administration probing quality issues with plastic syringes made in China and (2) potential supply chain disruptions in the Red Sea, at the Panama Canal and on the U.S.-Mexico border. However, with the Inventories and Inventory Sentiment indexes both above 50 percent in December, those developments are just “areas of caution at this point,” LeMaster said.
.@ISM’s Nancy LeMaster: “#Inflation continued as the top-of-mind concern among (Hospital #ISMPMI survey respondents). They indicated … supply and pharmaceutical prices would increase in the new year, while labor costs remain high.” https://t.co/kFSzLiu9dt #economy #healthcare
— Institute for Supply Management (@ism) January 9, 2024
In other subindex news:
- All three prices gauges — the Prices, Prices: Pharmaceuticals and Prices: Supplies indexes — remained at 55 percent or higher. “It seems like it’s a consistent theme we talk about every month of pressures on hospitals because of high costs, but that’s because nothing changes,” LeMaster said.
- The Technology Spend Index remained in expansion territory but fell 4 percentage points to 53 percent, which she said was a mild surprise because hospitals typically boost capital investment at the end of the year.
- The Backlog of Orders Index increased 11 percentage points to land in strong expansion territory, suggesting that some patients had longer wait times or scheduled procedures farther in advance.
In case you missed the Report On Business® Roundup on the release of the December Manufacturing PMI®, you can read it here. The Roundup on the release of the Services PMI® can be read here. For the most up-to-date content on the three indexes in the ISM® Report On Business® family, use #ISMPMI on X, formerly known as Twitter.
(Photo credit: Getty Images/Phillyskater)