Report On Business® Roundup: September Hospital PMI®

While the growth wasn’t as strong as the previous month, the Hospital ISM^® Report On Business^® data for September showed typical early-fall robust patient traffic, especially given the availability of flu and updated COVID-19 vaccines.

The Hospital PMI^® registered 55 percent but might have reflected a calm before the storms. The data was collected before Hurricane Helene slammed into the Southeast U.S., causing a plant shutdown for a critical supplier of IV fluids. On Monday, Hurricane Milton reached Category 5 status over the Gulf of Mexico as it barreled toward Florida.

Even amid the positive September numbers, survey respondents cited supply chain disruptions and increased back orders. Those challenges figure to be felt more acutely in September; for example, the post-Helene IV fluid shortage was felt around the country.

ISM: hospital PMI shows further expansion in Sep for subsector, w/ overall activity, new orders, and employment all growing, albeit each at slower paces than Aug; interesting that delivery performance has slowed for over a year now, despite consistent supply chain improvements: pic.twitter.com/OOT1c3uhDO

— E.J. Antoni, Ph.D. (@RealEJAntoni) October 7, 2024

“Generally, business is good as we move into the fourth quarter. Facilities are reporting that volumes have increased somewhat, as is usually the case at this time of year,” Nancy LeMaster, MBA, Chair of the Institute for Supply Management^® Hospital Business Survey Committee, said in a press release.

She continued, “Inventories are increasing as COVID-19 and flu vaccines and other seasonal medications arrive. However, some hospitals are reporting (supply chain congestion).”

The Supplier Deliveries Index remained in mild expansion territory, up 2 percentage points compared to August. Supplier Deliveries is the only ISM^® Report On Business^® subindex that is inversed; a reading above 50 percent indicates slower delivery times, which is typical as demand increases and the economy improves. And often, disruptions are a factor.

In another sign of supply chain snags, the Touchless Orders Index went into contraction, dropping 6.5 percentage points to 47 percent.

Wrote a survey respondent, “(Delivery services) have gotten slower and undependable. We never know if or when they’ll deliver. They have our toilet paper, paper towels, trash liners. We can’t do without those kinds of items.”

Such issues were an annoyance as hospital stocked up on vaccines and other supplies for not only fall and winter seasonal ailments, but also the recent trend of scheduled treatments before health insurance deductibles reset at the end of the year.

The Inventories Index was up 6.5 percentage points into expansion territory, and that it was by design was reflected in little movement in the Inventory Sentiment Index, which stayed in expansion but increased just 0.5 point.

In addition to inventories, health-care organizations continued investing in labor, with the Employment Index decreasing in September but remaining in strong expansion territory. Perhaps most encouragingly, the Technology Spend Index registered 56.5 percent, a 13th straight month of expansion as many hospitals continue to tap such technologies as artificial intelligence and machine learning.

Also, LeMaster said, “Some organizations have acquired or are building new facilities (both inpatient and outpatient), contributing to technology spend. It has also been reported that organizations are also looking to augment provider networks, which in some cases is related to expansion of their physical plants.”

Hospital #ISMPMI survey respondents: “Back orders from manufacturers have increased, resulting in supply constraints.” Also, “Concerned about issues in China and the ability to get supplies from manufacturers located there.” https://t.co/n6qkoo3pRm #economy #healthcare

— Institute for Supply Management (@ism) October 7, 2024

In other news:

• After the Prices gauges — Prices, Prices: Pharmaceuticals and Prices: Supplies — were in mild expansion territory, strong month-over-month growth has resumed. All three indexes were above 55 percent in September, increasing a combined 11.5 percentage points.
• The Backlog of Orders Index — which measures patients, not supplies — went into contraction in September, indicating hospitals capably handled the traffic.
• The Case Mix Index, which measures the shift of Medicare and Medicaid patients (who generally require longer stays) compared to the previous month, registered 48.5 percent, ending a four-month stay in expansion territory.

In case you missed the Report On Business^® Roundup on the release of the September 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.

(Photo credit: Getty Images/SDI Productions)