hospital operating margins

Hospitals End 2024 in Encouraging Financial Position

Hospitals finished 2024 in generally good financial condition, according to a new report. Hospital net revenue rose six percent in 2024 and outpatient revenue was up 10 percent, according to the report. With expenses rising but at a rate lower than inflation, hospitals ended 2024 with average operating margins of 7.6 percent – their highest rate for the year. At the same time, however, bad debt and charity care increased, most likely because of the contraction of Medicaid eligibility following the end of pandemic-related eligibility expansion and the continued trend of insurers denying care. Thus, while the short-term financial outlook [...]

Hospital Margins Expected to Remain Low Next Year

Labor costs that outstrip increases in reimbursements will lead hospitals to continue to have low operating margins through 2025, according to Moody’s, the bond and credit rating company. While the growth of hospital labor costs is no longer as great as it was during the COVID-19 pandemic, Moody’s reports, labor costs continue to grow – as do supply costs. Meanwhile, reimbursements are not keeping pace, with government payments especially lagging. As a result of these factors, hospital margins and operating cash flow margins are down and prospects for recovery in the coming year are only modest. Learn more about how [...]