ISM® PMI® Reports Roundup: August Hospital

Peak season in health care has largely shifted over the years, from the summer months to the winter, as consumers rush to schedule elective procedures before insurance deductibles reset at the end of the year.

However, the ISM^® Hospital PMI^® Report for August suggested a return to the good old days, as survey respondents commented on unseasonably higher levels of patient traffic at their facilities. That trend was also evident in the data, as strong growth in the Business Activity and New Orders indexes lifted the Hospital PMI^® to 51.3 percent, its highest reading in four months.

Profit margin-eating issues that have nagged health-care executives and purchasing managers remain — tariffs, employment cuts, growing vaccine confusion and the specter of Medicare and Medicaid cuts. Regarding funding cuts, facilities and systems “are still more in a state of unknown than actual experience at this point,” Nancy LeMaster, MBA, Chair of the Institute for Supply Management^® Hospital Business Survey Committee, told a conference call of reporters on Monday.

🏥 The ISM Hospital PMI rose +0.3 pts to 51.3 in August 2025, marking a second straight month of expansion after briefly contracting in June, supported by steady business activity and stronger new orders. pic.twitter.com/pbv5tAluQZ

— MTS Insights (@MTSInsights) September 8, 2025

Unknowns could have been a factor in the increased patient traffic in August. Amid looming budget cuts in the news and fears of a slowing economy, were consumers seeking to get treatment at a still-optimal time? That’s unclear, LeMaster said, but demand levels in the coming months — particularly as deductibles prepare to reset — could offer clues.

“The emphasis on the volumes (in August) is that they were steady,” LeMaster said. “There’s that school of thought when you’re looking at cuts or a potential economic slowdown that people should get things taken care of before something happens. The big question will happen in the fourth quarter, if hospitals see that spike or not.”

A winter spike could occur for another reason — confusion over access to COVID-19 vaccines, and at least one state’s official disdain for inoculations in general. While most shots are administered at clinics or pharmacies, the consequences of vaccine confusion or resistance show up at hospitals — and this winter, it could be in the form of increased respiratory cases.

“There could be an impact on the level of hospitalizations,” LeMaster said. “Hospitals are thinking ahead to winter season, and if there is difficulty in getting vaccines — a lot of hospitals provide flu shots for communities, not so much COVID shots — that’s a big concern. Are people just going to be confused and just not get any vaccines, and what kind of spillover effect will that have on the flu? There’s just a lot of uncertainty.”

Despite health care again being the lone ray of sunshine in the federal jobs report in August, the Employment Index fell into contraction territory. That appeared to be by design, as some panelists reported that their facilities tried to protected margins by reducing a controllable expense, labor. (Some of the health-care jobs in the federal report are outside the ambulatory, inpatient and nursing home-type facilities covered by the Hospital PMI^®.)

Lead times shortened, as the Supplier Deliveries Index moved into contraction territory, which indicates faster performance. But there was no relief on costs — the Prices Index registering 68 percent, and panelists indicated that tariffs were a factor. For five straight months, the Prices: Supplies Index has been at 60 percent or above, and the Prices: Pharmaceuticals Index at 55 percent or higher.

“Once again, hospitals are trying to manage cash flows and working on bringing costs down as a strategy for dealing with margin compression,” LeMaster said. “The problem is pricing continues to be a main sticking point, and it’s getting worse with the tariff situation.”

Hospital #ISMPMI survey respondents: “Summer months are typically slower (for) patient volumes, but (not) this year. (The result was) higher-than-expected revenue performance.” Also, “Local summer events have increased patient visits.” #economy #healthcare https://t.co/cVoUwcJd6l

— Institute for Supply Management (@ism) September 8, 2025

In other news:

• The Inventories Index had an “unchanged” status (a reading of 50 percent), and the Inventory Sentiment Index was in expansion as hospitals tried to increase inventory turns to cut holding costs and free cash flow, LeMaster said.
• The Technology Spend Index registered 59 percent, its highest reading since May (59 percent).
• The Touchless Orders Index was up only slightly, to 52.5 percent, but LeMaster said hospitals should have more ordering ease if supplier deliveries are faster.

In case you missed the ISM^® PMI^® Reports Roundup on the release of the August Manufacturing PMI^® Report, you can read it here. The Roundup on the release of the Services PMI^® Report can be read here. For the most up-to-date content on the ISM^® PMI^® Reports, use #ISMPMI on X, formerly known as Twitter.