Hospital profitability growth varies widely by region

Hospital profitability was up nationally last year as operating margins increased 16% year over year. But not every region experienced the same success, according to data from the Jan. 30 Kaufman Hall "National Hospital Flash Report."

The average profitability change from 2022 to 2023 varied widely based on the region of the country and size of the hospital. Below is a breakdown of operating margin and operating EBITDA margin for each region across the U.S.:

Operating margin: 28%
Operating EBITDA margin: 13%

Operating margin: -2%
Operating EBITDA margin: -31%

Operating margin: 19%
Operating EBITDA margin: 15%

Northeast / Mid-Atlantic
Operating margin: 24%
Operating EBITDA margin: 5%

Great Plains
Operating margin: 20%
Operating EBITDA margin: 10%

There were big swings in the month over month operating margin growth or decline as well. For example, in the Midwest, average operating margin grew 26% from November to December while over the same time period average operating margin for hospitals in the Great Plains region dropped 10%.

The size of the hospital also affected average operating margin growth or decline. Smaller hospitals with 25 or fewer beds reported average operating margins increased 17.3% from 2022 to 2023 while hospitals with 200-299 beds reported just a 3.9% average operating margin growth.

Hospitals with more than 500 beds had the greatest operating margin leap at 80.5% year over year.

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