Hospitals have done a commendable job in addressing cost and productivity. Over the past four years, the median cost measured by adjusted discharge (weighted by case mix and area wage index) has grown at an annualized rate of 1.6 percent, significantly below historic rates of 4 to 7 percent. Given the uncertainty surrounding government payment for services, the questions top of mind for many finance leaders are “Have we done enough?” and “What more can we do?”

Compounding this challenge is the growing backlog of capital investments that have been delayed or underfunded over the past three years. During this same four years, median age of plant has increased from 9.9 to 11.4 years, providing clear evidence that, for many hospitals, access to capital and the ability to realize a commitment to renovate facilities and replace equipment are daunting prospects.

The data in the accompanying exhibits provide a perspective on where things currently stand and can give finance leaders a comparative basis for evaluating the relative performance of their organizations. 

Exhibit 1


Exhibit 2


This report is based on key operational and financial indicators for 600 nonfederal general acute-care hospitals that contributed annual data to the Truven Health ActionOI® database. For additional information, please contact Phil Gaughan.

Publication Date: Tuesday, October 01, 2013

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