Economic Activity in Hospital Subsector Grows for Third Consecutive Month

Economic activity in the hospital subsector grew in November for the third consecutive month after contracting twice in a four-month period, with 35 consecutive months of growth reported prior to that, according to the latest Hospital ISM Report on Business from the Institute for Supply Management.

“The Hospital PMI registered 59.8% in November, a 7.7-percentage point increase from the October reading of 52.1%, indicating a third consecutive month of growth after a contraction in August,” Nancy LeMaster, chair of the ISM’s hospital business survey committee, said. “The Business Activity Index expanded for the third consecutive month. The New Orders Index remained in expansion for the third straight month, and the Employment Index returned to expansion territory. The Supplier Deliveries Index remained in expansion, which indicates slower delivery performance. The Case Mix Index remained in expansion territory, registering 54%, an increase of 2.5 percentage points compared to the October figure of 51.5%. The Days Payable Outstanding Index expanded for the second consecutive month at 52.5%, up one percentage point from the 51.5% reported in October. The Technology Spend Index reading of 57% is an increase of 1.5 percentage points compared to the 55.5% recorded in October. The Touchless Orders Index registered 51.5%, the same reading as reported in October.

“Hospital business survey committee respondents attributed volume growth in November to an increase in elective procedures and seasonal respiratory cases. Several panelists indicated success in hiring additional staff during the month but remained cautious regarding the competitive labor market. Inflation and increasing costs are still putting pressure on hospital margins, which resulted in continuing cost-cutting measures. Back orders and shortages lingered, but panelists’ comments in general suggested a slow, steady increase in supplier delivery performance.”

Hospital PMI History