AHA: Hospital margins down for fourth quarter

A new report from the American Hospital Association concludes that hospitals dove deeper into the negative margin zone during the fourth quarter of 2008, driven by forces--lower volume and financially-troubled patients--which may not let up for a while.

The AHA noted that more than half of all U.S. hospitals were posting overall negative margins. Specifically, 53 percent of the 658 hospitals reporting to the AHA Databank reported overall losses in the fourth quarter of last year. When the AHA gathered data from those hospitals into a single pool, the overall profit margin for the quarter was negative-7.8 percent, as compared with a positive 4.6 for the same quarter in 2007.

The negative margins were driven by income decreases in all categories, including drops in investment income and patient care volume. Outpatient volume grew 2.8 percent compared with the same quarter in 2007, but surgery volume was down, with inpatient operations declining by 2.2 percent and ambulatory visits falling 1 percent.

Meanwhile, as though these challenges weren't enough, hospital costs climbed, with total uncompensated care rising by 6.6 percent and average borrowing costs by 12 percent.

To learn more about the report:
- read this Modern Healthcare article [1] (reg. req.)

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New research says U.S. hospitals in trouble [4]