49% of Community Hospitals Have Operating Margins Below 2%, Survey Shows

Roughly 49 percent of community hospitals reported they currently have an operating margin less than 2 percent, according to a Community Hospital 100 and Anthelio Healthcare Solutions survey (pdf).

The survey, which received responses from 60 community hospitals that have less than 300 beds, also showed there is some variance in the financial health of community hospitals. About 23 percent of respondents said they have an operating margin, excluding investment income, of 4 percent or higher, while 22 percent reported they are currently running with negative operating margins.

Other results of the survey include the following:

•    Approximately 67 percent of respondents said they have more than 80 days cash on hand, while 12 percent said they have less than 30 days cash on hand.
•    Employee compensation and benefit costs were more than 50 percent of total operating costs for 31 percent of the community hospitals that responded.
•    Operating costs have increased by more than 5 percent over the past three years for 33 percent of respondents.
•    Most community hospitals surveyed brought in more than $75 million in net revenue last fiscal year, and 33 percent reported they had cuts in Medicare and Medicaid reimbursement of $5 million or more.

Related Articles on Community Hospital Finances:

Pennsylvania's Memorial Hospital Turns 2010 Losses Into 2011 Profit
Oklahoma's Norman Regional's Year-to-Date Financials Close to Predictions
Because Good Isn't Good Enough: How Dr. Michael Williams Turned Around Hill Country Memorial Hospital

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