While the median operating revenue growth rate at adult care systems was 5.1 percent, it totaled 10.1 percent at children’s hospitals. Such a gap, which has historically been the case, widened in fiscal 2022, largely driven by a faster rebound in demand, a better payer mix and a larger portion of inpatient versus outpatient revenue, according to the report.
Other comparative metrics to note included:
- Median operating cash flow margin of 10.4 percent vs. 4.9 percent in adult care.
- Median days’ cash on hand was 416, more than double the 206 equivalent in adult care.
- Operating margin median of 4.2 percent versus -0.3 percent adult care margin.
- Total debt to cash flow of 2.5x vs. 3.6x for adult care.
Moody’s also raised a couple of notes of caution. While such metrics did increase the gap between children’s hospital performance versus their adult care counterparts, many of the metrics remained below pre-pandemic levels.
Also, children’s hospitals have a much higher reliance on Medicaid reimbursements, with a median of 54.3 percent of gross revenue compared with 16.6 percent for adult hospitals.
“The risk of cuts in the joint federal/state program is the greatest vulnerability facing children’s hospitals,” the report noted.
The data was based on 23 children’s hospitals across the country.
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