TEMPE, Ariz., Nov. 5, 2021 /PRNewswire/ -- 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 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 63.4 percent in October, increasing 2.8 percentage points from the September reading of 60.6 percent, indicating a 17th consecutive month of growth. This is the highest reading since August 2020 (63.8 percent). The Business Activity Index decreased slightly from September. The New Orders Index 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."
LeMaster continues, "This Business Survey Committee respondent quote might best sum up the month: 'It's crazy out there.' 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). 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."
Hospital PMI® History
Average for 12 months – 60.9
High – 63.4
Low – 55.8
About This Report
The information compiled in this report is for the month of October 2021.
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.
ISM ROB Content
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About Institute for Supply Management®
Institute for Supply Management® (ISM®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, 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® leads the profession through the ISM® Report On Business®, its highly regarded certification programs and the ISM® Advance™ Digital Platform. The ISM® Report On Business® has been issued by the association since 1931, except for a four-year interruption during World War II.
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 November 2021 data will be released at 10:00 a.m. ET on Tuesday, December 7, 2021.
*Unless the New York Stock Exchange is closed.
Contact: Michelle Rusk
Report On Business® Analyst
ISM®, ROB/Research Manager
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