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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jun 16, 2024 - Labor Costs Increase
                                    • Hospital industry employment and average wages for nonsupervisory employees increased slightly during the first four months of 2024, according to the US Bureau of Labor Statistics (BLS). Hospitals slightly increased their prices during the first four months of 2024, according to the BLS.
                                    • Patient demand and revenue at US hospitals increased for the 12th consecutive month in April, according to Strata Decision Technology. Outpatient revenue led growth with a 15.3% year-over-year increase, as outpatient visits experienced the highest year-over-year increase (12.9%). Hospitals faced continued pressure from expense increases. Total non-labor expense saw the biggest increase (10.5%), driven by significant increases in supply (16.7%) and drug costs (14.9%).
                                    • 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).
                                    • 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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