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 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 2,400 hospital firms in the US with about $1.3 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 5-6 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

                                    May 5, 2023 - President Biden Ends Covid-19 National Emergency
                                    • President Biden signed in April a congressional resolution to bring the US national emergency to respond to the COVID-19 pandemic to a close after three years — weeks before it was set to expire alongside a separate public health emergency. The resolution ends several waivers for federal health programs Medicare, Medicaid, and the Children's Health Insurance Program. Ending the national emergency early could also terminate some of flexibility for the Continuation of Health Coverage program. The Biden administration had set a May 11 deadline for both the national emergency and the public health emergency, giving states the go-ahead to begin winding down the measures enacted under them.
                                    • The US Congress has turned its attention to scenarios in which hospitals buy doctors' offices and charge higher hospital rates for the exact same service delivered in those offices, according to Axios news service. Experts say that the issue is closely related to the long-running push for "site-neutral payments," the idea that Medicare should pay the same amount for the same service regardless of where it's performed. US Representative Annie Kuster plans to cosponsor a bill by Representative Victoria Spartz addressing the issue when it is reintroduced during this Congressional session, Kuster's office said. US Senators Mike Braun, Maggie Hassan, and Tammy Baldwin are among the senators discussing bipartisan legislation on the issue, according to Axios, although there is no bill yet.
                                    • Some of the most successful nonprofit health systems are using a decades-old federal program to buy drugs at reduced prices and sell them to patients and their insurers for much more, according to The Wall Street Journal. The program is intended to offer large discounts to a small number of hospitals to help low-income patients, but a quirk in federal law allows some hospitals in affluent communities to access the program by qualifying as a “rural referral center.” The federal drug-discount program, known as 340B, has grown rapidly in recent years and now includes about 2,600 nonprofit and government hospitals, which spent at least $38 billion on discounted drugs in 2021, according to the Health Resources and Services Administration, the federal agency that oversees the program.
                                    • Unprofitable services are being shifted to independent nonprofit clinics. Medicare and Medicaid pay these clinics, known as federally qualified health center look-alikes, significantly more than they would if the sites were owned by hospitals. Like the nearly 1,400 federally qualified health centers — which get those additional dollars as well — a clinic designated by the government as a “look-alike” is also eligible for federal programs that could help reduce costs and recruit providers. They allow the clinics to obtain prescription drugs at deep discounts and attract doctors by making them eligible for a government program that helps them pay off their student debt if they work in an area with a shortage of medical providers. Hospitals are betting that the federally qualified health center look-alikes will allow them to spin off a money-losing service and use the extra funding from Medicare and Medicaid to expand services. At the same time, hospitals expect many patients from the look-alike clinics who need to be admitted for services or require specialized care to be routed to their hospitals.
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