Report On Business® Roundup: August Hospital PMI®
In a way, the Hospital ISM® Report On Business® data for August was a snapshot of facilities functioning according to plan: Patient traffic increased, staffing levels rose to meet the demand, supply chains ran smoother, and the greater health-care good was served.
Those positive dynamics were reflected in the Hospital PMI® registering 58.6 percent, a 5.3-percentage point increase compared to July, but panelists’ comments regarding how much of their facilities’ volume increases were due to COVID-19 cases is at least a yellow flag.
“One data point or one month does not make a trend,” Nancy LeMaster, MBA, Chair of the Institute for Supply Management® Hospital Business Survey Committee, told a conference call of reporters on Friday. “But it would be nice if this continues because hospitals are still feeling margin pressures. It was a strong volume month, strong employment month and strong supply chain month. Hospitals were on good footing going into September.”
The Hospital @ISM® Report On Business® for August found increased patient traffic and #employment, an uptick in #COVID19 cases, improved supplier delivery performance and moderate prices growth. The PMI® increased to 58.6%. https://t.co/WF6veZsgOR #ISMPMI #economy #healthcare
— Institute for Supply Management (@ism) September 6, 2024
The two biggest demand gauges exceeded 60 percent in August, as the Business Activity Index increased 8.5 percentage points and the New Orders Index was up 10.5 points. Meanwhile, the Employment Index reached its highest level since October 2018, elevating 6 percentage points to above 60 percent.
In recent months, hospitals have been diligent about replacing traveling personnel with permanent staff, as well as tapping technology to make it easier to coordinate schedules and enable nurses to pick up extra shifts. Those efforts might have culminated in August and — in a case of perfect timing — helped meet the increased demand, LeMaster said.
“A lot of it was the fruit of efforts that were underway,” she said. “The efforts to replace agency and temporary staff with permanent clinicians came into play during a spike in COVID cases. The hospitals were able to staff for it.”
LeMaster added, “COVID definitely pushed volume numbers up. That wasn’t something I saw a lot of press coverage on. However, it was not something causing hospitals to scramble. They were able to handle it in part because of the employment number.”
The level of COVID-19 mentions among panelists’ comments was perhaps at its highest in months. Viral activity levels in U.S. wastewater this summer have been at their highest in two years, with “very high” designations in almost all states. A new slate of vaccines is on the way, but signs indicate Americans won’t be stampeding to get them.
To be clear, the newest coronavirus strains are less deadly, and health-care facilities are managing cases much more efficiently. But the surges of 2020-21 remain fresh in panelists’ memories, LeMaster said.
“Hospitals are in the business of hoping for the best but preparing for the worst,” she said. “But when you look at the Business Activity and New Orders indexes, those were big jumps from July to August, and we have to keep an eye on what that could mean for September and October. Fortunately, hospitals are putting all of their (pandemic) learning to good use.”
The Hospital #ISMPMI Employment Index was up 6 percentage points in August to above 60%. The added staff helped keep patient traffic moving, as the Backlog of Orders Index did not budge from its July figure, slightly above 50%. https://t.co/sfpAjwyMS9 #economy #healthcare
— Dan Zeiger (@ZeigerDan) September 6, 2024
In other news:
- The Supplier Deliveries Index was in mild expansion, indicating slower deliveries. However, the index decreased 3.5 percentage points compared to July, so performance improved.
- All three Prices gauges — Prices, Prices: Pharmaceuticals and Prices: Supplies — were in moderate expansion; although the pharmaceuticals index was up 3 percentage points, price increases were manageable for hospitals.
- The Inventories Index dropped 3.5 percentage points into contraction territory, with syringes and blood collection vials among the products in short supply.
LeMaster said that there are so many health-care supplies and products, there will always be disruptions or shortages for something, and facilities manage to work through them. A good sign in August: The Touchless Orders Index, which measures automated orders end-to-end, increased 5 percentage points, to 53.5 percent.
“There’s no direct correlation between supplier deliveries and touchless orders, trends show that as supplier deliveries improve and are stable, the Touchless Orders Index number gets better,” LeMaster said. “Distributors have been able to fill orders without substituting products or delaying orders, so that’s a positive metric for stability in hospitals.”
In case you missed the Report On Business® Roundup on the release of the August 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.