Hospitals on the rebound, show stronger operating margins

Hospitals have rebounded from the Great Recession and are showing stronger operating margins than in years past, even as more care shifts from inpatient to outpatient, according to the new American Hospital Association's annual Hospital Statistics guide.

Those findings, based on fiscal 2012 data, show that acute-care hospitals are delivering more care in ED and outpatient settings as the number of inpatient days, inpatient surgeries and births continues to decline. At the same time, inpatient beds per capita have remained steady at 2.6 per 1,000 people—unchanged since 2009—and the average length of stay has remained consistent at 5.4 days.

The trends are accelerating. In 2012, emergency department visits increased 2.9% over the previous year, compared with 1.7% between 2011 and 2010. Outpatient visits also increased nearly 2.9% to almost 675 million, compared with year-over-year growth of only 0.7% between 2010 and 2011.

Hospitals reported $821.3 billion in total revenue in 2012, compared with $755.3 billion the previous year, and $730.9 billion in 2010. “I think hospital revenue did rebound somewhat due to the economy,” said Caroline Steinberg, vice president of health trends analysis.

At the same time, the level of uncompensated care continued to grow, with hospitals spending 6.1% of their expenses, or a record $45.9 billion, on bad debt and charity care.

Despite fears that the challenging operating environment would lead hospitals to close their doors, the total number of hospitals increased slightly, from 4,973 to 4,999. That compares with 5,010 hospitals in 2008.

Consolidation has brought more hospitals into systems. There were 3,100 hospitals that were part of a system in 2012 compared with 3,007 in 2011 and 2,868 in 2008.

Acute-care facilities employed 5.6 million people in 2012, 1.5% more than the previous year, and about 800,000 more than a decade earlier.

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