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 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 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

                                    Dec 4, 2022 - Federal Pandemic Aid Disbursements Questioned
                                    • Tens of billions of dollars in federal aid given to hospitals to help them cope with the strains of the coronavirus pandemic enriched some well-off systems while failing to meet the needs of many that were struggling, according to a Wall Street Journal analysis. The mismatch stemmed in part from the way the federal government determined how much a hospital should get, according to the newspaper's analysis of federal financial-disclosure reports. A main factor used to allocate relief was a hospital’s revenue, rather than Covid-19 caseload or financial distress. The idea was that revenue was a good indicator of a hospital’s size. Federal officials early in the program acknowledged criticism of aid payouts tied to hospital revenue but said they used the formula in order to move quickly.
                                    • Large, wealthy hospital systems — including some nonprofits — that reported profits from patient care during the periods they got aid were among the recipients. Some were well off enough to put money into investment funds, while others spent on new facilities and expanded campuses. Hundreds of other hospitals that got federal funding reported losses. Some were forced to lay off nurses and make other cuts, saying they didn’t get enough aid to overcome their strains. Some served areas that had among the highest COVID-19 death rates. The revenue-based award system, especially prevalent in the early days of the pandemic, tended to favor hospitals with higher prices.
                                    • Hospitals have found a new way to provide often-unprofitable outpatient services for their poorest patients by setting up independent, nonprofit organizations to provide primary care, according to industry experts. 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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