Economic activity in the hospital subsector grew in June after one month of contraction preceded by 35 consecutive months of growth, say the nation’s hospital supply executives in the latest Hospital ISM® Report On Business®.
The report was issued today by Nancy LeMaster, MBA, Chair of the Institute for Supply Management® (ISM®) Hospital Business Survey Committee: “The Hospital PMI® registered 51.5 percent in June, a 2.4-percentage point increase from the May reading of 49.1 percent, indicating a return to growth after one month of contraction. The Business Activity Index increased compared to May. The New Orders Index returned to expansion territory, and the Employment Index continued to indicate contraction. The Case Mix Index was unchanged in June; the reading of 50 percent is down 3 percentage points compared to the May figure of 53 percent. The Days Payable Outstanding Index returned to expansion territory at 51.5 percent, up 5.5 percentage points from the 46 percent reported in May. The Technology Spend Index reading of 52 percent is an increase of 0.5 percentage point compared to the 51.5 percent recorded in May. The Touchless Orders Index reading of 51.5 percent is an increase of 1 percentage point compared to the May figure of 50.5 percent.”
LeMaster continues, “With increases in business activity and new orders, the Hospital PMI® returned to expansion territory. Business Survey Committee respondents commented on increased elective procedure volumes and revenue growth. However, they cautioned that those gains were offset by inflationary factors on labor and supply costs. The Prices: Supplies and Prices: Pharmaceuticals indexes have been in ‘increasing’ territory for 43 and 63 consecutive months, respectively. The resulting margin pressures have some organizations freezing some positions or laying off personnel. There continues to be a shortage of clinical personnel, and competition for experienced employees remains intense. The Supplier Deliveries Index set a record in June, with a fifth consecutive month in ‘faster’ territory. Despite this, panelists commented on continued back orders within segments of the medical device supply chain. They also commented that drug shortages were worse than supply shortages.”