Research

Toward True Sustainability

    In 2017, nonprofit hospital operating expense growth outpaced operating revenue growth for the second consecutive year, pushing median operating margins to an all-time low.

    The enduring nature of today’s revenue pressures—direct pricing threats, site-of-care shifts, new payment models, and more—means that cost containment is more important than ever to maintaining margins. While not all providers can be low-cost in an absolute sense, every hospital and health system should strive to be cost disciplined, keeping cost growth low relative to revenue growth over time.

    This research report explores the characteristics of cost-disciplined organizations and examines the role of hospital and health system executives in achieving sustainable expense growth.

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