Hospital PMI® at 52.3%; March 2024 Hospital ISM® Report On Business®

TEMPE, Ariz., April 5, 2024 /PRNewswire/ -- Economic activity in the hospital subsector grew in March for the seventh consecutive month after contracting twice in the previous four-month period, with 35 consecutive months of growth prior to that, 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 52.3 percent in March, a 4.3-percentage point decrease from the February reading of 56.6 percent, indicating a seventh consecutive month of growth after a contraction in August. The Business Activity Index expanded for the seventh consecutive month. The New Orders Index remained in expansion for the seventh straight month, and the Employment Index also stayed in expansion territory. The Supplier Deliveries Index remained in expansion (which indicates slower delivery performance). The Case Mix Index registered 51 percent, a decrease of 1 percentage point compared to the February figure of 52 percent. The Days Payable Outstanding Index contracted in March after expanding for five consecutive months, registering 49.5 percent, down 1 percentage point from the 50.5 percent reported in February. The Technology Spend Index reading of 57 percent is an increase of 3 percentage points compared to the 54 percent recorded in February. The Touchless Orders Index registered 52.5 percent, up 1.5 percentage points from the 51 percent reported in February."

LeMaster continues, "The revenue issues caused by the Change Healthcare cybersecurity breach were top of mind for several Hospital Business Survey Committee respondents. The incident impacted health systems of all sizes. Although the Days Payable Outstanding Index contracted slightly in March, panelists from affected systems indicated expanded payment terms will be sought to help cope with cash flow issues. There was no consensus on volume growth in the month. Some respondents indicated surgical volumes were down at their facilities, while others indicated volumes were steady. There were multiple mentions of mergers and acquisitions used to increase volumes versus organic growth rates. Back orders and product substitutions continued but received less attention than in previous months. Some panelists noted ongoing efforts to replace contract labor with permanent employees, while there was also mention of continued pressures to limit hiring whenever possible." 

About This Report
The information compiled in this report is for the month of March 2024.

The Hospital PMI^® was developed in collaboration with the Association for Health Care Resource & Materials Management (AHRMM), an association for the health care supply chain profession, and a professional membership group of the American Hospital Association (AHA).

The data presented herein is obtained from a survey of hospital supply executives based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The Hospital ISM^® Report On Business^® is based on data compiled from hospital purchasing and supply executives nationwide. Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Employment, Supplier Deliveries, Inventories, Prices, Prices: Pharmaceuticals, Prices: Supplies, Backlog of Orders, Imports, Inventory Sentiment, Case Mix, Days Payable Outstanding, Technology Spend, and Touchless Orders), this report shows the percentage reporting each response and the diffusion index. Responses represent raw data and are never changed. Beginning in January 2021, the Report On Business^® staff and consultants are gathering market information to better validate the Exports Index. Exports Index data are still being collected.

The Hospital PMI^® is a composite index computed from the following, equally weighted indexes: Business Activity, New Orders, Employment and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Hospital PMI^® index reading above 50 percent indicates that the hospital sub-sector is generally expanding; below 50 percent indicates that it is generally declining. For the sub-indexes, except Supplier Deliveries, an index reading above 50 percent indicates that the sub-index is generally expanding; below 50 percent indicates that it is generally contracting. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

The Hospital ISM^® Report On Business^® survey is sent out to the Hospital Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on U.S. operations for the current month. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the fifth business day of the following month.

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About Institute for Supply Management^®
Institute for Supply Management^® (ISM^®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM empowers and leads the profession through the ISM^® Report On Business^®, its highly-regarded certification and training programs, corporate services, events, and assessments. The ISM^® Report On Business^®, Manufacturing, Services, and Hospital, are three of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders. For more information, please visit: www.ismworld.org.

The text version of the public Hospital ISM^® Report On Business^® is posted on ISM^®'s website at www.ismrob.org on the fifth business day* of every month at 10:00 a.m. ET.

The next Hospital ISM^® Report On Business^® featuring April 2024 data will be released at 10:00 a.m. ET on Tuesday, May 7, 2024.

*Unless the New York Stock Exchange is closed.

SOURCE Institute for Supply Management