US nonprofit and public healthcare medians improved in 2021

U.S. nonprofit and public healthcare median financial metrics temporarily rebounded in 2021. However, declines are likely in 2022, according to investor service Moody's, which published its annual Not-for-Profit and Public Healthcare median series Sept. 7.

Actions taken in response to the COVID-19 pandemic drove recovery. Measures include government relief grants and cost-cutting initiatives coupled with volume recovery to increase profitability at the 50 largest and smallest hospitals in the fiscal year 2021. Additionally, cash reserves were bolstered with Medicare advance payments, favorable investment returns, and decreased capital spending. 

Key takeaways from the report: 

  • Profitability increased for the 50 largest hospitals from 6.5 percent to 8 percent, and the 50 smallest from 7 percent to 8.1 percent.

  • Median expense and revenue growth rates increased significantly for the 50 largest hospitals from 9.4 percent to 11 percent and the 50 smallest hospitals from 7.3 percent to 9.9 percent.

  • Liquidity improved for both the largest and smallest hospitals, with median days of cash on hand rising from 260 to 276 for the 50 largest hospitals and from 243 to 246 for the 50 smallest hospitals.

  • Median debt to cash flow decreased for the 50 largest hospitals and held steady for the 50 smallest. 

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