Hospitals

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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 hospital firms 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.

    • A typical hospital has 100 to 300 beds and serves 5,800 to 11,200 patients annually.
    • Most hospitals are considered community hospitals, and are operated by non-profit, for-profit, or state or local government organizations.
    • There are about 2,500 hospital firms in the US with about $1.1 trillion in annual revenue.
    • 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 6.1 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

                                    Coronavirus Update

                                    Nov 11, 2021 - Ten States Sue To Block Health Care Worker Vaccination Mandate
                                    • Ten states filed a lawsuit in mid-November seeking to block the Biden administration’s coronavirus vaccine mandate for health care workers. The plaintiffs claim that the Occupational Safety and Health Administration does not have the authority to dictate such policy. They also claim that the mandate “threatens with job loss millions of health care workers who risked their lives in the early days of the Covid-19 pandemic to care for strangers and friends in their communities.”
                                    • Pharmaceutical firm Merck said that its experimental pill for those with COVID-19 reduced hospitalizations and deaths by half. The company said that it will soon ask health officials in the US and around the world to authorize the pill’s use. All other COVID-19 treatments now authorized in the US require an IV or injection. Experts say that a pill taken at home could ease pressure on hospitals.
                                    • Hospitals in areas with high numbers of new COVID-19 cases are being overwhelmed by those cases combined with patients returning for care for other ailments, according to The Wall Street Journal. Surgeries and treatments for cancer, heart disease, and other common conditions have rebounded this year, filling beds at many hospitals. At the same time, other respiratory viruses, such as RSV, have re-emerged along with public gatherings, adding to hospital strain. Many experts say that outcomes could be negatively impacted by the heavy case load.
                                    • Johns Hopkins University researchers had predicted that hospitals would be stretched to the limit by the oncoming surge of rescheduled surgeries alone. "Even if patient demand was diminished by 50 percent, which is a tremendous number, then there's still going to be a backlog of almost 400,000 cases in orthopedics" alone, said Dr. Amit Jain, a spinal surgeon at Hopkins. New COVID-19 safety protocols are also likely to over-extend hospitals, the researchers said. Waiting rooms will have to be kept at a lower capacity to ensure social distancing.
                                    • Four federal lawmakers are seeking answers from multinational investor-owned healthcare services company Tenet Healthcare about its use of federal taxpayer funds, including grants and loans from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The lawmakers questioned whether used the funds "to enrich its executives and shareholders rather than meet the needs of its healthcare providers and patients during the COVID-19 pandemic," in a letter to the system's Executive Chair and CEO, Ronald Rittenmeyer. Tenet has received more than $936 million in grants from the Provider Relief Fund and some $1.5 billion more in relief from Medicare Advance Payments and payroll tax match deferrals, according to the lawmakers. They also noted that despite the pandemic, Tenet reported annual earnings of more than $3.1 billion and available credit of $2.9 billion in 2020.
                                    • Pandemic-related payments to the largest hospital chains may have accelerated their acquisition plans by enabling them to purchase weakened competitors. CommonSpirit Health, a Catholic nonprofit system that is one of the biggest hospital networks , received well over $1 billion in federal aid to counter any financial losses caused by the shutdowns of lucrative elective surgeries and higher COVID-related costs. One of its divisions merged with Virginia Mason health system in Seattle in a move that strengthened CommonSpirit’s sway in Washington state. It also acquired a small hospital network in Arizona and helped start a company to analyze patient data across 40 states. Congress provided capital to hospitals that did not need it, according to Zack Cooper, a Yale health economist. “Regulators should really be looking at the transactions occurring,” he said.
                                    • The US Department of Health and Human Services (HHS) announced the availability of nearly $1 billion to strengthen COVID-19 response efforts and increase vaccinations in rural communities. The Health Resources and Services Administration, a part of HHS, will increase the number of vaccines sent to rural communities, expand testing and other COVID-19 prevention services, and work to increase vaccine confidence by empowering trusted local voices with additional funding for outreach efforts in underserved communities.
                                    • Employment at hospitals was unchanged year over year in October but was down 1.2% compared to October 2019, according to the US Bureau of Labor Statistics.
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