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
Sep 8, 2024 - Micro-hospitals Opening In More States
- The fast-changing nature of healthcare delivery and patient’s desire for convenience has led to the emergence of “micro-hospitals”. Micro-hospitals are small-scale inpatient facilities that operate 24/7and commonly have between eight and 10 beds where patients can be observed or admitted for a short stay. Not all micro-hospitals have the same design or service mix but most of them have services such as emergency medical care, laboratories and lab services, inpatient care, imaging, and pharmacy services. Some also have operating rooms to handle complicated surgeries. Others also offer ancillary services such as primary care, labor and delivery, dietary services, and pediatric care. Micro-hospitals have opened in Colorado, Nevada, Texas, Pennsylvania, and Arizona.
- Legislation introduced in the US Congress would require increased transparency for private equity investment in health care services companies like hospitals, dialysis centers, and physician groups. The Health Over Wealth Act would require PE-owned practices to publicly report their debt load, executive pay, lobbying activities, healthcare costs and service reductions. The biggest change would be expanded powers for the Department of Health and Human Services (HHS): Private equity firms would need to "obtain a license" from HHS to invest, either directly or indirectly, in a health care services firm. Were a firm to fail to qualify for such a license, it could be forced to divest existing portfolio companies. HHS also could prohibit any deal, even from licensees, while it conducts a study into the impact of private equity on health care. HHS also could block any sale-leaseback transaction that it believes "would lead to a long-term weakened financial status of the health care entity or place the public health at risk."
- 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.
- Hospital industry employment and average wages for nonsupervisory employees increased slightly during the first six months of 2024, according to the BLS. Hospitals slightly increased their prices during the first six months of 2024, according to the US Bureau of Labor Statistics (BLS).
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