Economic activity in the hospital subsector grew in April for the eighth consecutive month after contracting twice in the previous four-month period, with 35 consecutive months of growth prior to that, according to hospital supply executives in the latest Hospital ISM Report On Business.

The report was issued by Nancy LeMaster, chair of the Institute for Supply Management (ISM) Hospital Business Survey Committee.

“The Hospital PMI registered 53.5% in April, a 1.2-percentage point increase from the March reading of 52.3%, indicating an eighth consecutive month of growth after a contraction in August. The Business Activity Index expanded for the eighth consecutive month. The New Orders Index remained in expansion for the eighth straight month, and the Employment Index moved back into contraction territory,” LeMaster said. “The Supplier Deliveries Index remained in expansion (which indicates slower delivery performance). The Case Mix Index contracted in April after expanding for six consecutive months, registering 49%, a decrease of 2 percentage points compared to the March figure of 51%. The Days Payable Outstanding Index returned to expansion in April, registering 52.5%, up 3 percentage points from the 49.5% reported in March. The Technology Spend Index reading of 54.5% is a decrease of 2.5 percentage points compared to the 57% recorded in March. The Touchless Orders Index registered 51.5%, down 1 percentage point from the 52.5% reported in March.”

“Hospital Business Survey Committee respondents’ facilities had an uptick in patient volumes during April. Some suggested that volumes were back to pre-COVID-19 levels. Respondents continued to face margin pressures due to higher labor and supply costs,” LeMaster said. “Some panelists indicated nonclinical layoffs and delayed backfilling of positions were means of controlling costs. Others mentioned supply utilization reductions as a potential cost-reduction strategy. The Change Healthcare cyberattack continues to cause revenue challenges. The Days Payable Outstanding Index expanded in April, with some respondents commenting they were actively working to preserve cash. Inventory levels contracted due to the volume increases and active efforts to burn pandemic stock and reduce hedge stock.”