Moody's: Admissions were flat for the third straight year

New data reinforces Moody's negative outlook

Hospitals are doing a better job of expense control, which has helped them cope with slow revenue growth and flat admissions, according to Moody's latest medians report for not-for-profit hospitals.

The report drew on audited FY 2011 financial statements for 400 freestanding hospitals and single-state health systems, as well as 16 multi-state health systems. The annual medians include new data on:

  • Margins: The median operating margin was 2.5% in 2011, slightly up from 2.4% in 2010. The median net margin in 2011 was 4.9%, also slightly up from 4.7% the year prior.
  • Expenses: Continuing efforts to control salary and benefit costs helped keep median expense growth at 5% in 2011, below historic levels of above 7%.
  • Revenue: Moody's found that median revenue growth rose to 5.3% in 2011, which remains historically weak although an improvement over the 4.2% growth rate in 2010.
  • Admissions: Inpatient volumes have been largely unchanged since the 2008-2009 financial downturn, Moody's concludes, and hospitals are seeing a growing share of revenue from Medicare, Medicaid, and self-pay patients.

The reliance on government and self-pay revenueis an "ominous combination...due to the lower reimbursement rates from these payers," according to report author Sarah Vennekotter (Evans, Modern Healthcare, 8/23; Moody's report, 8/23).


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