Consistently strong growth among managed-care companies pushed that segment past hospitals as the largest healthcare service sector among investor-owned companies in 1993, according to a new report.
The information comes from WDI Capital Markets, a Hilton Head Island, S.C.-based investment banking and research firm. The firm this month will release its 1994 Healthcare Industry Report, which provides a five-year perspective on 731 publicly traded healthcare companies.
Hospitals historically have been the largest category in revenues among publicly traded healthcare service companies. However, according to WDI's new report, market forces are changing that mix. Last year, managed-care companies posted revenues of $24.2 billion, a 25% increase over 1992. Net income for those companies rose 65% to $1.2 billion. Managed-care companies also posted the largest aggregate profit, WDI reported.
Investor-owned hospital companies' total revenues edged up 3% to $23.6 billion in 1993, and profits dropped 22% to $867 million, WDI reported.
Despite all the mergers and acquisitions, hospital company revenues were nearly flat in 1993, reflecting that those firms are "just reshuffling the deck," said Jack Cumming, WDI's president.
WDI said other 1993 trends included:
Long-term care: revenues of $9.8 billion, up 16%. Net income of $372.3 million, up 198%.
Home healthcare: revenues of $6.2 billion, up 15%. Net income of $201 million, down 29%
Laboratory services: revenues of $4.3 billion, up 16%. Net income of $354.4 million, up 36%.
Outpatient services: revenues of $2.9 billion, up 23%. Net income of $279.7 million, up 29%.
Rehabilitation: revenues of $2.7 billion, up 29%. Net income of $60 million, down 29%.
Information services: revenues of $1.6 billion, up 14%. Net income of $22.6 million, down 63%.
Healthcare real estate: revenues of $609 million, up 19%. Net income of $318.9 million, up 80%.
Imaging services: revenues of $554.3 million, up 2%. Net loss of $54.7 million.
The entire healthcare services sector reported $80.5 billion in revenues in 1993, up 15% from the previous year. Profits rose 19% to $3.7 billion. That was considerably better than the healthcare products sectors. Medical devices and supplies reported a 7% increase in revenues to $48.1 billion and a 28% drop in profits to $3.9 billion. Pharmaceutical companies reported a 10% rise to $129.8 billion and a 4% drop in profits to $15.7 billion.