Hospital profit margins continued their upward march during the first nine months of 1993, according to the latest hospital economic report from the American Hospital Association.
The AHA said hospitals posted an aggregate total profit margin of 5.8% through the third quarter of last year. The new nine-month figure is the highest reported by the AHA since 1986.
Also, aggregate profits earned by the nation's hospitals jumped more than 18% in 1992 to nearly $12 billion, according to AHA figures (Dec. 6, 1993). That followed a 23% increase in profits in 1991, AHA data show.
The new report comes at a time when the AHA and other hospital groups are fighting proposed reductions in budgeted Medicare and Medicaid spending to finance healthcare reform.
The AHA's quarterly economic report, released last week, is based on a monthly survey of 2,000 hospitals.
Operating margins, which the AHA calls net patient margins, rose to 0.9% during the first three quarters of 1993, compared with 0.7% during the same period in 1992. That is the highest nine-month operating margin reported by the AHA since 1986.
In the text accompanying the report, the AHA provided no specific hospital profit margin figures or historical context. "The slowdown in expense growth helped to stabilize the revenue margins, which increased slightly in comparison (with) 1992," the report said.
According to the AHA, hospital revenues through the first nine months of 1993 rose 7.7%, compared with 10.1% during the year-ago period. Hospital expenses, meanwhile, rose 7.4% during the first three quarters of last year. That's substantially lower than the 9.7% increase in hospital expenses during the same period in 1992.
Also through the first three quarters of last year:
Total admissions rose 0.6%, compared with a 0.6% decline during the same period in 1992.
Hospitals' average occupancy rate dipped to 61.9% from 62.6% during the first nine months of 1992.
Hospitals' average length of stay dropped to 6.2 days from 6.4 days during the year-ago period.
Outpatient visits climbed 6.8%, compared with 6.5% during the first nine months of 1992.
The number of full-time-equivalent hospital employees rose just 1%, compared with a 1.4% rise during the year-ago period.