Hospitals and health systems sharply curbed spending to improve operating margins in 2009, said Moody's Investors Service.
Spending cuts help hospitals, systems improve margins: Moody's
Among stand-alone hospitals and systems that operate in one state, revenue growth slowed last year, but not as swiftly as expenses dropped, Moody’s said in a newly released report. The rating agency said management efforts to slow spending contributed to the more sluggish expense growth.
Salaries and benefit costs climbed 5.6% last year, slower than 8.2% the prior year, thanks to job cuts and frozen or reduced pay, Moody’s said. The 2009 median operating margin for 401 solo hospitals and single-state systems included in analysis was 2.3% compared with 1.8% in 2008 and 2.1% in 2007. Meanwhile, 77 reported an operating loss in 2009, down from 111 the prior year, Moody’s said. Among the 16 health systems that operate in more than one state, the median operating margin increased to 2.6% in 2009 from 2.1% in 2008.
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