Nursing

News spotlight: Hospital profits plummet in U.S., study says

Nurse Leader Insider, March 9, 2009

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Hospitals' median profit margins dropped to zero in the third quarter of 2008, an all-time low, according to an analysis of government and proprietary data released by Thomson Reuters Healthcare last week.

The study, which examined more than 400 public, private, for-profit, and nonprofit facilities of various sizes, used 20 financial indicators to weigh the effects of the economic downturn. Researchers evaluated indicators including revenue, the total margin for non-profit hospitals, employment levels, and reimbursement rates.

The study also found 50% of the examined hospitals were unprofitable in the third quarter of 2008, and 25% had profit margins that were 7% below the break-even point.

Many facilities across the country are facing economic stress due to decreased hospital investment incomes, which normally provide financial security for operating budgets. Additionally, a spike in uninsured patients unable to pay their healthcare bills and paying patients delaying elective surgeries has also taken a fiscal toll on hospitals.

Sources: Los Angeles Times and Reuters.com



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