50 things to know about the hospital industry | 2017

The hospital industry looks much different in 2017 compared to 2010. Changing economic, regulatory and consumer demands have accelerated large-scale reform in healthcare delivery across the country. And despite the drastic shift in the U.S. political landscape, healthcare experts expect the drive to reduce healthcare costs, increase efficiency and demonstrate value to remain steady or intensify.

Here are 50 facts and statistics about the hospital industry in 2017.

1. There are 5,564 registered hospitals in the U.S., according to the American Hospital Association. This statistic includes federal hospitals, long-term care hospitals, psychiatric hospitals, institutions for the mentally disabled and alcohol and other chemical dependency rehabilitation hospitals.

2. Of these, 4,862 are considered community hospitals. Community hospitals represent about 85 percent of all hospitals in the U.S. There are 2,845 nonprofit community hospitals and 1,034 for-profit community hospitals. Additionally, 983 are owned by state or local (county, hospital district) government entities.

3. Of all hospitals in the U.S., 1,829 serve rural communities and are considered rural hospitals.

4. Out of total registered hospitals, about 20.2 percent are state-owned, 58.5 percent are nonprofit and 21.3 percent are for-profit.

5. Of rural hospitals, 1,337 are designated as Critical Access Hospitals by CMS. CAHs are rural hospitals with no more than 25 beds and are at least 35 miles (15 miles in areas with mountainous terrain or only secondary roads) away from another hospital. CAHs are paid differently by CMS than traditional acute care hospitals; their payments reflect their operating costs, rather than their patient volumes.

6. Despite the high number of rural hospitals, many of them are at risk of closing. As of December 2016, 80 rural hospitals have closed in the last six years. About 673 rural hospitals across 42 states are vulnerable to closure, according to a February 2016 study from iVantage Analytics.

7. Academic medical centers are hospitals and health systems with a close affiliation with a medical school. AMCs feature residency and often fellowship training programs and pursue clinical research in addition to direct patient care. They also often are considered tertiary care centers, because of their ability to treat a full range of complex conditions and access to subspecialists. In 2015, approximately 400 U.S. hospitals were affiliated with a medical school. There are 145 accredited medical schools in the country, according to the Association of American Medical Colleges.

8. U.S. healthcare spending increased 5.8 percent in 2015 to a total of $3.2 trillion, according to CMS' Office of the Actuary. Healthcare spending accounted for 17.8 percent of the GDP in 2015, up from 17.4 percent in 2014.

9. Hospital mergers and acquisition activity dipped slightly in 2016 compared to 2015. There were 102 hospital transactions announced in 2016 compared to 112 transactions announced in 2015. Last year's deal volume is still a significant increase (55 percent) from the 66 transactions announced in 2010. The sustained activity hospital mergers and acquisitions "is not surprising" due to many healthcare organizations' concerns about financial viability in a rapidly changing market, the report stated.

10. Of the 102 reported mergers and acquisitions, 75 involved nonprofit hospital buyers and 27 involved for-profit hospital buyers.

11. The five largest for-profit hospital operators, based on the number of hospitals, include:

  • Hospital Corporation of America (Nashville, Tenn.) — 169
  • Community Health Systems (Brentwood, Tenn.) — 158
  • Tenet Healthcare (Dallas) — 79
  • LifePoint Health (Brentwood, Tenn.) — 72, which includes acute care facilities within Brentwood, Tenn.-based Duke LifePoint Health
  • Prime Healthcare Services (Ontario, Calif.) — 44

12. The five largest nonprofit hospital systems, based on the number of hospitals, include:

  • Ascension Health (St. Louis) — 141
  • Catholic Health Initiatives (Englewood, Colo.) — 103
  • Trinity Health (Livonia, Mich.) — 92
  • Baylor, Scott & White (Dallas) — 48
  • Adventist Health Systems (Altamonte Springs, Fla.) — 46

13. The five largest nonprofit hospitals in America (by bed count) are:

  • NewYork-Presbyterian Hospital/Weill Cornell Medical Center (New York City) — 2,515
  • Florida Hospital Orlando — 2,247
  • Baptist Medical Center (San Antonio) — 1,563
  • Jackson Memorial Hospital (Miami) — 1,558
  • Yale New Haven (Conn.) Hospital — 1,541

14. The largest for-profit hospitals in America (by bed count) are:

  • Methodist Hospital (San Antonio) (affiliated with Methodist Healthcare System) — 1,570
  • Edinburg
  • Chippenham Hospital (Richmond, Va.) (affiliated with HCA) — 793
  • North Shore Medical Center (Miami) (data includes information for North Shore Medical Center - FMC campus) — 771
  • Henrico Doctors' Hospital (Richmond, Va.) (affiliated with HCA) — 767

15. The top five states with the most hospitals, according to Kaiser Health Facts,are:

  • Texas — 404
  • California — 342
  • Florida — 210
  • Illinois — 188
  • Pennsylvania — 186

16. The following health systems that contain the most short-term acute care hospitals in the United States. (Note: These figures do not include psychiatric, rehabilitation, children's, critical access, long-term or "other" types of hospitals.)

  • HCA (Nashville, Tenn.) — 167
  • Community Health Systems (Franklin, Tenn.) — 149
  • Department of Veterans Affairs (Washington, D.C.) — 141
  • Ascension Health (St. Louis) — 84
  • Tenet Healthcare (Dallas) — 62

17.  The number of inpatient hospital facilities decreased from 6,522 in December 1990 to 6,142 in December 2014. Total inpatient hospital beds have dropped from 32.8 beds per 1,000 people in 1990 to 17.3 in 2014, a decrease of 47 percent, according to CMS

18. Nationally, the hospital average length of stay significantly decreased from 9.0 days in 1990 to 5.0 days in 2014, a decrease of 44 percent, according to CMS.

19. The average cost per inpatient day in 2014, the latest data available, was $2,346 for nonprofit hospitals and $1,798 for for-profit hospitals. At nonprofit hospitals, the average cost per inpatient day was highest in California ($3,533) and lowest in South Dakota ($1,321). Among for-profit hospitals, the average cost per inpatient day was highest in New Jersey ($4,656) and lowest in South Dakota ($434).

20. There was an average of 2,174 outpatient visits per 1,000 people in 2014, up from an average of 2,000 visits in 2007, supporting the trend of inpatient surgeries moving to the outpatient setting.

21. The term "hospital acquired conditions" includes adverse drug events, catheter associated urinary tract defects, central line associated bloodstream infections, pressure ulcers and surgical site infections, among others. HHS estimated a 17 percent decline in HAC rates from 2010 to 2014, or 2.1 million fewer recorded HAC cases. HHS reported 87,000 fewer patient deaths in hospitals and nearly $20 billion in care cost savings as a result of the decrease in HACs over this period.

22. The American Hospital Association is the leading association representing U.S. hospitals. It is led by President and CEO Richard (Rick) Pollack.

23. The Federation of American Hospitals represents for-profit, investor-owned hospitals. It was founded in 1966 and is led by President and CEO Charles (Chip) Kahn.

24. America's Essential Hospitals represents safety-net hospitals, including many large, urban facilities. It is led by President and CEO Bruce Siegel, MD, MPH.

25. For 2012, the latest data available, the average operating margin for a nonprofit hospital was 2.6 percent, according to Moody's Investors Service.

26. In 2015, government payers underpaid hospitals for medical services by $57.8 billion, according to theAmerican Hospital Association. That year, under Medicare, hospitals received payment of 88 cents for every dollar spent caring for Medicare patients. Under Medicaid, hospitals received payment of 90 cents for every dollar spent caring for Medicaid patients.

27. From 1990 through 2015, U.S. hospitals' uncompensated care costs totaled $704.7 billion, according to a recent American Hospital Association report. From 2000 to 2015, national uncompensated care costs fluctuated, reaching a high of $45.9 billion in 2012, which represented 6.1 percent of total expenses. In 2015, total uncompensated care costs were $35.7 billion, representing 4.2 percent of total expenses — the lowest level in 26 years.

28. A greater number of hospitals and health systems continue to engage in alternative payment models with the goal of fully transitioning to value-based care delivery. Nationally hospitals reported about 50 percent of reimbursement they receive is related to a form of value measurement in 2016, up 4 percent from 2014.

29. But many provider organizations are still figuring out how to implement complex payment models successfully. Of U.S. hospitals involved in value-based contracts, 22 percent of hospitals reported meeting their goal to reduce administrative costs, 26 percent reported meeting goals to reduce healthcare costs, 30 percent reported meeting care coordination goals and 40 percent reported meeting goals for improving patient outcomes.

30. Industry experts expected value-based reform to have a negative financial impact on many providers, particularly on low-performing hospitals. But in an October 2015 report, the United States Government Accountability Office found the Value-Based Purchasing Program had "modest effects on Medicare payments and no apparent change in quality-of-care trends."

31. CMS and HHS have continued to aggressively pursue value-based care initiatives. By March 2016, CMS was nine months ahead of schedule when it attained its goal of tying 30 percent of Medicare payments to quality.

32. Hospitals and health systems are entering a variety of value-based payment models with CMS and private payers. Many value-based agreements with private payers are similar to CMS' VBP program where there are incentives for providing high-quality care that meets certain benchmarks. Others are more complex and may include accountable care organization arrangements, capitated payments for a patient over a set period of time, or bundled payments for certain medical and surgical services.

33. More than half of all Medicaid beneficiaries nationally received most or all of their care from risk-based managed care organizations in 2016, according to KFF. There were a total of 278 Medicaid MCOs as of September 2016.

34. In 2015, CMS star ratings on its Hospital Compare website as a way to streamline hospital ratings for patients trying to make healthcare decisions. CMS changed the formula for calculating hospitals' star ratings in December 2016, lowering the number of quality measures used from 64 measures in seven categories in October 2016 to 57 measures in the same seven categories, which are:

  • Mortality (7 measures)
  • Safety of care (8 measures)
  • Readmission (8 measures)
  • Patient experience (11 measures)
  • Effectiveness of care (11 measures)
  • Timeliness of care (7 measures)
  • Efficient use of medical imaging (5 measures)

35. As a result of changes to CMS' star rating formula, significantly fewer hospitals earned five-star recognition.

  • Five stars: 83 hospitals in December 2016 (112 in October 2016)
  • Four stars: 946 (970)
  • Three stars: 1,794 (1,789)
  • Two stars: 694 (701)
  • One star: 112 (121)

36. Accountable care organizations have proven a popular value-based model, at least in terms of systems willing to test their viability. ACOs are one of several programs created by the Center for Medicare & Medicaid Innovation, which was created and funded by the ACA to pilot new care models intended to reduce costs and improve quality. CMS created several models for ACOs, including the Medicare Shared Savings Program, the Pioneer ACO program and the Next Generation ACO model. The 21 Next Gen ACOsannouncedin 2016 — took on more performance risk than ACOs in other models, but they also have the potential to share in greater savings. The CMMI also launched the Bundled Payments for Care Improvement Program, which will pay hospitals a bundled rate for certain hospital-based and outpatient services associated with selected DRGs.

37. There approximately 660 ACOs in the U.S. in 2015. As of January 2016, the number of ACOs rose to 838, according to Leavitt Partners.

38. Leavitt Partners and Health Affairs identified 1,217 accountable care or value-based contracts across the U.S. as of January 2016.

39. Because of demands to lower costs, improve quality, coordinate care and improve population health, hospitals are concerned with their alignment with physicians. The term 'clinical integration' has become a generic phrase to describe healthcare professionals working more closely together. But a CIN is actually a specific type of legal arrangement that allows hospitals and physicians to collaborate on improving quality and efficiency, while remaining independent entities. There were about 500 CIN entities in the U.S. in 2015, Advisory Board estimated. About 60 percent of hospitals indicated they were forming or planned to form a CIN in the next year, according to a 2015 Caradigm survey.

40. Despite the variety of models available to achieve clinical integration, physician employment has risen in popularity, likely because it eliminates many legal hurdles associated with hospital-physician relationships. According toMedscape's 2015 Physician Compensation Report, 63 percent of physicians are employed.

41. Anticipated physician shortages in certain areas of the country are also driving hospitals' efforts to align with physicians. The Association of American Medical Colleges estimated the U.S. physician shortage will reach between 61,700 and 94,700 physicians by 2025.

42. Physician shortages are expected in four broad categories: primary care, medical specialties, surgical specialties and other specialties. By 2025, AAMC estimated a shortfall of between 14,900 and 35,600 primary care physicians. Non-primary care specialties are expected to experience a shortfall of between 37,400 and 60,300 physicians.

43. Burnout, defined as physical and emotional exhaustion due to prolonged stress, has become increasingly prevalent among U.S. physicians.Nearly 50 percent of physicians reported frequent or constant feelings of professional burnout in the past year, according to a 2016 survey by Merritt Hawkins. Physicians who experienced burnout attributed their job dissatisfaction to two major sources: EHR data entry and increased clerical requirements under ICD-10.

44. Physicians spend, on average, 50 percent of their work day entering data into EHRs and completing clerical work. They spend 27 percent of work hours interacting with patients, according to a 2016 study in Annals of Internal Medicine.

45. The highest percentages of burnout occurred among physicians practicing emergency medicine (59 percent), followed by OB-GYNs (56 percent) and family physicians, internists, and infectious disease physicians (all at 55 percent), according to a 2017 Medscape survey. The top four categories are all physicians who deal directly with patients with a range of complex problems.

46. In total, healthcare added 474,700 jobs in 2015, according to the Bureau of Labor Statistics. That's more than 2014 (309,000) and 2013 (159,700) combined. Healthcare added an average of 40,000 jobs per month in 2015, compared with an average of 26,000 per month in 2014, according to the BLS.

47. There was an 18 percent rate of turnover among hospital CEOs in 2015, the most recent year for which data is available, according the American College of Healthcare Executives. While lower than the record high of 20 percent reported for 2013, it was still among the highest rates reported in the last 15 years.

448. The average base salary for an independent health system CFO in 2014 was $416,200, while the average base salary for a CFO of an independent hospital was $247,900, according to Integrated Healthcare Strategies' "2014 National Healthcare Leadership Compensation Survey" report.

49. Many payers have narrowed their provider networks to better manage costs under the ACA. This trend, combined with the rise in popularity of high deductible health plans among consumers, has contributed to a rise in balance billing incidents. The emergency department has become a hot spot for balance billing cases due to the often involuntary nature of emergency treatment. One in five inpatient emergency department admissions resulted in a surprise medical bill from an out-of-network provider in 2014, according to a Health Affairs study.

50. Some hospitals have undertaken significant expansion and renovation projects as they prepare for an uptick in patient volumes. Here were the five most expensive hospital facility projects announced or completed in 2016:

1. Miami-based Jackson Health System in July unveiled a $1.8 billion building plan that includes rebuilding at the Jackson Memorial Hospital campus, expansions at its other facilities and the construction of a $253 million medical campus in Doral, Fla.

2. Cleveland-based MetroHealth System plans to borrow $1.25 billion to build a new hospital on its main campus.

3.UC San Diego Health on Nov. 20 opened Jacobs Medical Center in La Jolla, Calif., a nearly $1 billion, 10-story medical center equipped with enhanced amenities for patients and expanded clinical capabilities.

4. The Massachusetts Department of Public Health's Public Health Council voted Oct. 20 to approve Boston Children's Hospital's proposal to begin construction on a $1 billion expansion project.

5. City, state and federal officials held a ribbon-cutting ceremony Nov. 18 to mark the long-awaited opening of the Veterans Affairs hospital in New Orleans. Although it was projected to cost about $625 million, a U.S. Government Accountability Office report said the actual cost of the new hospital came closer to $1 billion. 

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HHS nominee Dr. Tom Price's 2nd confirmation hearing: 5 things to know
Flagler Hospital's chief of surgery dies in car crash
Dr. Joseph Gulfo in the running to lead FDA

 

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