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.)

Related Articles:
Case study: Baptist Health loses $25M due to investment losses
AHA survey: Negative profit margins for hospitals
New research says U.S. hospitals in trouble
MA hospital profits double since 2004

Suggested Articles

Presidential candidate Kamala Harris wants to get rid of the tax break drug companies get for DTC ads

Healthcare software company Phreesia closed its first day of trading as a public company Thursday about 40% above its set price.

Growing the biosimilar market could lead to significant healthcare cost savings, according to a new report.