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 2,400 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 Shortage Deepens

Hospitals struggle with shortages of nurses, medical technicians, pharmacists, and other clinical workers.

Industry size & Structure

The average hospital employs about 1,800 workers and generates $438 million in annual revenue.

    • There are about 2,400 hospital firms in the US with about $1.3 trillion in annual revenue.
    • 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Feb 16, 2024 - Prices Increase
                                    • Hospitals modestly increased their prices during 2023, according to the US Bureau of Labor Statistics. Industry employment increased slightly during 2023 while average wages for nonsupervisory employees were unchanged.
                                    • Hospitals may see a 3.8% rate of drug price inflation in 2024, according to healthcare consulting firm Vizient. It is the highest projected increase since July 2019. Higher drug costs will be driven by specialty drugs including new gene therapies. One dose of gene therapy, a rapidly growing field that involves modifying the expression of genes for therapeutic purposes, can exceed $2 million. There are currently 11 approved gene therapy products (excluding chimeric antigen receptor (CAR)-T therapies).
                                    • The US Supreme Court has agreed to hear arguments later in 2024 about whether the federal government can require emergency room physicians at hospitals that receive Medicare funding to perform abortions when they are needed to stabilize a patient. US Health and Human Services Secretary Xavier Becerra wrote to hospitals in 2023 reminding them of their obligations under federal law to provide abortions to patients in crisis, and the Biden administration has investigated individual hospitals for non-compliance. This is the second major abortion case with national implications that the court has agreed to take this term. The other concerns federal regulation of abortion pills, which are used in more than half of abortions nationwide, and a decision could impact whether and where the drugs are available even in states that have voted to protect their use.
                                    • Health systems have been pushing back against proposals in Congress for "site-neutral" policies, according to Chief Healthcare Excecutive. Site neutral policies would result in hospital outpatient departments and physicians offices being reimbursed at the same rate. Proponents say such policies would save billions of dollars in the Medicare program, but many industry leaders say that hospitals would be badly hurt by such policies, especially since many are struggling financially. Industry leaders say that reducing reimbursement rates to their outpatient facilities could hurt patient access to care, and that their outpatient clinics treat a higher percentage of patients from underserved communities and patients with more serious medical conditions.
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