Hospital PMI at 63.4%

Nov. 8, 2021

Economic activity in the hospital subsector grew in October for the 17th consecutive month, say the nation’s hospital supply executives in the latest Hospital Institute of Supply Management (ISM) Report On Business.

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

The New Orders Index, according to an ISM report, increased in October compared to September. The Employment Index remained in contraction, with a minimal increase in October compared to September. The Case Mix Index decreased to 54.5 percent, down 1 percentage point compared to the September reading of 55.5 percent. The Days Payable Outstanding Index registered 51.5 percent, an increase of 3.5 percentage points from the September reading of 48 percent. The Technology Spend Index registered 53 percent, an increase of 1 percentage point from the September reading of 52 percent.

Back orders and their impact on operations was top of mind in describing the month of October. Shortages and delays impacted availability of supplies and equipment, well beyond personal protective equipment (PPE), according to an ISM press release.

Respondents indicated their facilities were increasing inventory levels and devoting significant resources to identifying clinically acceptable substitutions. The grip of COVID-19 loosened in some parts of the country, but many panelists commented that intensive care units (ICUs) remained at capacity and elective procedure postponements continued.

One respondent indicated elective procedures had been delayed 30 days; another reported a moratorium on procedures requiring post-operative inpatient recovery. Staffing shortages continued for all levels and types of employees, and some comments cited the negative impact of higher staffing costs on hospital margins.

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

ISM press release