Hospitals' cash levels and profits increased in 1995, according to MODERN HEALTHCARE's latest index of leading economic indicators.
The index, prepared by HCIA, a Baltimore-based healthcare information company, showed growing operating margins, levels of cash and capital spending. This quarter's report is based on data from 1,008 hospitals whose fiscal years ended between Jan. 1 and June 30, 1995. The indicators are compared with the prior year for the same facilities.
The latest collection of indicators includes two new categories. One is capital costs per adjusted discharge, which shows how much hospitals are spending on capital needs, such as equipment, building expansions and information systems. The data show capital spending rose 5% to $356 per adjusted discharge.
The other new category is cash flow margin, which is a hospital's total profit margin with depreciation and interest costs added into net income. The calculation is similar to earnings before interest, taxes, depreciation and amortization, a formula commonly referred to as EBITDA.
From HCIA's calculations, it's clear that hospitals are emptier on the inpatient side but busier in the outpatient departments. The occupancy rate slipped to 42.5% from 44.3% in the previous year, while outpatient revenues accounted for 37.5% of revenues, a 5.6% increase compared with the previous year.
Meanwhile, capital costs are up, but labor is down, according to HCIA. FTEs per 100 adjusted discharges dropped slightly to 6.21 compared with 6.37 in the prior year.
Also, the data show hospitals continue to increase their cash levels, in part by shortening the amount of time patient bills go uncollected. Days in net accounts receivable dropped 2% to 66.77, and days' cash on hand rose 10% to 51.95, HCIA reported.