Hospitals
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,500 hospitals in the US provide acute care and surgeries for patients on either a scheduled or emergency basis. Most hospitals are considered community hospitals, and are operated by non-profit, for-profit, or state or local government organizations.
Conflict with Insurers
While hospitals depend on private insurers for revenue, both groups struggle to agree on how best to treat patients.
Labor Shortages
Hospitals struggle with shortages of nurses, medical technicians, pharmacists, and other clinical workers.
Industry size & Structure
The average hospital employs about 2,000 workers and generates $480 million in annual revenue.
- There are about 2,500 hospital firms in the US with about $1.2 trillion in annual revenue and employing 4.9 million people.
- Most hospitals are considered community hospitals, and are operated by non-profit, for-profit, or state or local government organizations.
- A typical hospital has 100 to 300 beds and serves 5,800 to 11,200 patients annually.
- The largest US hospital companies include Hospital Corporation of America (HCA), Adventist Health, and Tenet Healthcare Corporation.
- The average length of stay in a hospital is 4-5 days.
- The average hospital occupancy rate in urban hospitals is about 62%, while the occupancy rate in rural hospitals is 37%.
- The majority of hospital employees are dedicated to patient care (doctors, nurses, aides and clinical workers). Other professions within a hospital are office/administrative support, cleaning and maintenance, management, food service, and community and social services.
Industry Forecast
Hospitals Industry Growth
Recent Developments
Mar 7, 2025 - Nearly 750 Rural US Hospitals Are At Risk Of Closure
- Nearly 750 rural US hospitals are at risk of closure due to financial problems, according to Becker's Health Care. Nearly half of those hospitals are at immediate risk of closure. The count of 748 at-risk rural hospitals comes from an analysis by the Center for Healthcare Quality and Payment Reform of hospital financial information collected by the Centers for Medicare and Medicaid Services. The CMS analysis lists two distinct levels of vulnerability among rural healthcare facilities: risk of closure and immediate risk of closure. Nearly every state has hospitals at risk of closure, measured by financial reserves that can cover losses on patient services for six to seven years. In over half of the states, 25% or more of rural hospitals face this risk, with 11 states having a majority of their rural hospitals in jeopardy. There are 315 rural hospitals at immediate risk of shutting down due to severe financial difficulties. Hospitals facing immediate threat of closure are those for which financial reserves could offset losses on patient services for two to three years at most.
- Federal lawmakers are considering several budget-cutting policies that would hurt the health care sector, and particularly hospitals, as they look for ways to pay for an extension of President Trump’s tax cuts, according to StatNews. House Republicans plan to use a special budget process to renew tax cuts for individuals, enact immigration measures, and boost military spending. The process, called budget reconciliation, avoids the risk of filibuster, allowing Republicans to enact their priorities without support from any Democrats.
- Most large health systems have recovered or exceeded their pre-pandemic margins but small and rural hospitals continue to struggle with financial performance, according to Moody’s credit rating agency. Operating performance, as defined by revenue, gradually improved at the 50 largest US hospitals in 2023, with cash flow margins increasing from 5.1% to 5.7%. Annual operating revenue growth also increased for the largest hospitals, to 9.3%. It surpassed the 8.6% expense growth for the 50 largest hospitals, reversing the trend from 2022. The 50 smallest Moody’s rated hospitals saw operating cash flow margin continue to decrease from 3.2% to 2.9%. And 68% of the 50 smallest hospitals reported an operating deficit—evidence of the ever-growing gap between large and small hospitals. This cohort of smallest hospitals and health systems had a median number of maintained beds of 283 and median revenues of $478 million.
- Hospitals slightly increased their prices during 2024, according to the US Bureau of Labor Statistics (BLS). Hospital industry employment and average wages for nonsupervisory employees increased slightly during the first month of 2025, according to the BLS.
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