Hospital Profit Margins Increase in First Half of 2010
Hospital operating margins have remained steady over the past several years, following a cyclic pattern of increases in the first half of the year and decreases in the second half. According to an analysis of nonfederal general acute care hospitals, the first half of 2010 continued this pattern. At the end of the second quarter of 2010, hospital margins had risen to 3.5 percent, up from only 2.4 percent at the end of 2009. As of the second quarter 2010, all classes of hospitals studied (major teaching; teaching; and large, medium, and small community hospitals) posted operating margins between 2.9 and 6.8 percent. Major teaching hospitals enjoyed the highest margins.
Compared with the same quarter a year earlier, margins remained relatively steady for most groups, dropping just slightly for all groups except for small community and major teaching hospitals, where they increased. These relatively steady profits are likely tied to hospitals' ability to control expenses to match fluctuations in revenues.
This report is based on key operational and financial indicators for nonfederal general acute care hospitals that contributed quarterly data to the Thomson Reuters ActionOI® database. Hospital responses were weighted to make the sample comparable with the national distribution of all hospitals based on hospital class, location, ownership, and profitability. For more information, e-mail David Koepke, PhD, firstname.lastname@example.org.
Publication Date: Tuesday, February 01, 2011