Planning and Strategy
Data recently released by the American Hospital Association shows that community hospitals continued to see growth in operating and net revenues in 2008, despite the growth of physician-owned hospitals. This data is further proof that physician-owned hospitals do not hurt community hospitals.
Community hospitals had a combined profit of $17 billion in 2008, despite a $4.5 billion loss on investments. During the past 15 years, operating revenue has grown on average 6.1 percent annually. In 2007 and 2008 it grew 6 and 6.4 percent, respectively, with a total operating revenue in 2008 of $648 billion. Even accounting for the recent investment losses, hospitals showed growth in net revenue for a total of $643 billion, a 2.8 percent growth from 2007. In addition, community hospitals experienced increased admissions in 2008.
Other highlights of the AHA report show that in 2008 community hospitals had:
- an increase of more than 400,000 in admissions, growing to more than 35 million
- an increase in inpatient days of more than 1.5 million to more than 196 million
- an increase in emergency room visits of 1.8 percent.
Preliminary data for 2009 shows the trend continuing. According to a study by Thomson Reuters, 80 percent of the nation's hospitals were in black in the second quarter of 2009. The average total profit margin for U.S. hospitals hit 8.4 percent in the second quarter of 2009, up from 0.37 percent in the third quarter of 2008.