Hospitals have been profitable for most of 2023 (2024)

FAQs

Hospitals have been profitable for most of 2023? ›

Market analyst firm Syntellis Performance Solutions has released a report showing hospitals in the U.S. have been profitable for the last seven months, with September 2023 showing a median operating margin of 1.6%.

As of December 2023, the median calendar year-to-date operating margin index for hospitals stood at 2.3%, marking a welcome improvement. Contributing to this positive shift were year-end accounting adjustments, which played a pivotal role in boosting overall performance, as revealed in the report.

The new CMS data show that nearly half of the 4,644 Medicare-enrolled hospitals are non-profit (49.2 percent), 36.1 percent are for-profit, and 14.7 percent are government-owned.

Provider profit pools faced substantial pressure in 2022 and are likely to continue to do so in 2023 as a result of inflation and increased labor costs. We now estimate that total EBITDA will fall by 25 percent from 2021 to 2023, declining to $235 billion.

Total net income declined sharply in 2022 to $910 million as many hospitals experienced increases in operating expenses and significant reductions in nonoperating revenue. Data for 2023 show a positive margin on operations across the sector, with total net operating income of approximately $1.6 billion.

Moody's Investors Service offered a more optimistic outlook for hospitals in 2024, raising its outlook from “negative” to “stable.” Moody's projects that hospitals will see improved revenues in the coming year, but also said health systems must manage their finances wisely to continue their recovery.

In 2023, Singapore dominated the ranking of the world's health and health systems, followed by Japan and South Korea.

Nonprofit hospitals are driven by a commitment to community service and a mission to provide accessible healthcare to all, regardless of a patient's ability to pay. These facilities are often founded by charitable organizations, religious groups, or community initiatives, or may be affiliated with a medical school.

The average American hospital barely breaks even. But some are enormous profit centers. Forbes' first-ever survey of America's most profitable hospitals reveals that some American hospitals make 25 cents or more for every $1 in patient revenue they take in.

What will happen to hospitals in the future? ›

PwC envisions the hospital of the future as a network of physical and virtual delivery assets connected by a single digital system and capabilities, enabling care to be delivered in communities, at home or in facilities as required by clinicians and preferred by patients.

The fastest growth in healthcare may occur in several segments. We estimate that healthcare profit pools will grow at a 7 percent CAGR, from $583 billion in 2022 to $819 billion in 2027.

Total U.S. healthcare layoffs in 2023 went up by an over 90 percent increase from the total number of healthcare layoffs in the U.S. in 2022.

While medical care prices increased by 2.2% between March 2023 and March 2024, the prices of many other consumer goods increased by significantly more. Prices for all goods and services increased by 3.5%.

Federal spending on domestic and global health programs and services accounted for 29% of net federal outlays in fiscal year (FY) 2023 (taking into account offsetting receipts), or $1.9 trillion out of $6.4 trillion (Figure 1).

The average hospital bad debt amount across nearly 4,500 U.S. hospitals for 2021 is $11.5 million. The median figure is $4.3 million. The average bad debt to net patient revenue ratio for these hospitals is 46.6% and the median is 15.7%.