Survey: Non-profits see dismal 2008 results

Non-profit hospitals had a dismal year in 2008, with investment losses sapping whatever margins they were able to squeeze out of operational improvements, according to the results of a new survey compiled by trade publication Modern Healthcare.

The survey, which included data from 203 multihospital health systems, showed that the group of religious, secular and locally-run government systems had overall net losses of about $5.9 billion. The average system showed a $31 million net loss for fiscal '08, the worst performance in recent memory.

This contrasts sharply with the dozen for-profit systems that participated, which did much better, if not incredibly well. The systems had a net income of $123 million for fiscal '08. For-profit hospital systems nationally, including large systems like Tenet and HCA, had overall net income of $1.5 billion.

Perhaps in bad times, running hospitals on a mass scale offers economies, while in better times, more intimate relationships with customers are more fruitful? Not necessarily. What was more significant was that for-profits have two big advantages over non-profits: they don't rely on variable-rate bonds, which have been in the doghouse of late, and they don't maintain large equity portfolios.

To learn more about these results:
- read this Modern Healthcare piece (reg. req.)

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