The fiscal health of the nation's hospitals is strengthening, according to MODERN HEALTHCARE's new Index of Leading Economic Indicators.
The index, prepared by HCIA, a Baltimore-based healthcare research firm, provides the most up-to-date information on key financial indicators in the $400 billion hospital industry (See chart).
MODERN HEALTHCARE will be reporting this exclusive information on a quarterly basis beginning with this issue. The information is gathered from Medicare cost reports analyzed by HCIA.
Rather than waiting until the end of the year to tally 1993 industry figures, the MODERN HEALTHCARE Index will provide a progressive analysis throughout the year of how hospitals are managing financially.
This quarter's report includes information from 311 hospitals whose fiscal years ended between Jan. 31 and March 31, 1993. The information is compared with the hospitals' comparable year-ago figures.
Overall, the picture looks good for hospitals. Although length of stay and discharges are dropping, hospitals are more profitable than ever, according to HCIA figures. Length of stay dropped 2%, as patients were discharged more quickly.
One of the biggest changes came in outpatient days. Hospitals reported a 9% increase in outpatient days, indicating they were experiencing growth in visits to various outpatient surgery, rehabilitation, mental health and primary-care programs.
Financially, hospitals seem to be adjusting to that switch. Revenues are growing faster than expenses, lifting profit margins.
HCIA figures show that hospitals reported an operating profit margin of 3.19% for their fiscal year, compared with 3.09% in the previous year.
Clearly, hospitals are keeping costs in line. Whether the credit lies in good management, low interest rates or competition among medical products vendors, hospital expenses are rising more slowly. HCIA reported only a 4% increase in expense per adjusted discharge for those hospitals whose fiscal years ended in early 1993.
That compares with a 9% increase in hospital expenses in 1992.