Small and mid-sized hospitals, watch out: A.M. Best wants you to know that many of you aren't paying close enough attention to your bottom line.
As it is, smaller hospitals have historically been less profitable, with many struggling to meet the 1 to 3 percent average operating margin that most larger not-for-profits have enjoyed (though not perhaps in these economic times). They've struggled with a poor payer mix, higher overhead, lower-margin services and lower revenue, not to mention lower Medicaid volumes and comparatively low disproportionate share hospital payments.
Meanwhile, mid-sized hospitals of 25 to 100 beds are having a devil of a time recruiting physicians because of limited access to capital given the overall freeze in the financial markets.
Analysts at A.M. Best say that smaller non-profit hospitals, especially, need to focus on strategic planning and make sure they have a clear, simple mission that includes plans for adequate profitability.
To learn more about A.M. Best's report:
- read this Healthcare Finance News article
Related Articles:
Fitch describes non-profit hospitals that will do well post-reform
S&P downgrades for non-profit hospitals rise sharply
Fitch: Median ratio for non-profit hospitals fall for first time in years