Chart 4.1: Percentage of Hospitals with Negative Total and Operating
Margins, 1995 – 2013
45%
40%
Negative Operating Margin
35%
30%
25%
20%
Negative Total Margin
15%
10%
5%
0%
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
12
13
Chart 4.2: Aggregate Total Hospital Margins(1) and Operating Margins,(2)
1993 – 2013
10%
8%
Total Margin
6%
4%
Operating Margin
2%
0%
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
Total Hospital Margin is calculated as the difference between total net revenue and total expenses divided by total net revenue.
(2)
Operating Margin is calculated as the difference between operating revenue and total expenses divided by operating revenue.
12
13
Chart 4.3: Distribution of Outpatient vs. Inpatient Revenues, 1993 – 2013
100%
90%
Percentage of Revenue
80%
Gross Inpatient
Revenue
70%
60%
50%
40%
30%
Gross Outpatient
Revenue
20%
10%
0%
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
Chart 4.4: Annual Change in Hospital Operating Revenue and Expenses
per Adjusted Admission,(1) 1993 – 2013
18%
Change in Total Expenses
Change in Operating Revenue
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
An aggregate measure of workload reflecting the number of inpatient admissions, plus an estimate of the volume of
outpatient services, expressed in units equivalent to an inpatient admission in terms of level of effort.
Chart 4.5: Distribution of Hospital Cost by Payer Type, 1980, 2000 and
2013
Non-patient,(1) 2.7%
Uncompensated
Care,(2) 5.1%
Non-patient,(1) 2.8%
Uncompensated
Care,(2) 6.0%
Private Payer, 41.8%
Private Payer, 38.7%
Other Government,
6.1%
Other Government,
1.4%
Medicaid, 12.8%
Non-patient,(1) 2.2%
Uncompensated
Care,(2) 5.9%
Private Payer,(3) 33.3%
Other Government,
1.8%
Medicaid, 16.5%
Medicaid, 9.6%
Medicare, 40.2%
Medicare, 38.3%
Medicare, 34.6%
1980
2000
2013
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
Non-patient represents costs for cafeterias, parking lots, gift shops and other non-patient care operating services and
are not attributed to any one payer.
(2)
Uncompensated care represents bad debt expense and charity care, at cost.
(3)
Private payer formulas were updated in 2014 to account for the change in bad debt calculations,
which is now reported as a deduction from revenue rather than a expense.
(4)
Percentages were rounded, so they do not add to 100 percent in all years.
Chart 4.6: Aggregate Hospital Payment-to-cost Ratios for Private Payers,
Medicare and Medicaid, 1993 – 2013
150%
Private Payer
140%
130%
120%
110%
100%
Medicaid(1)
90%
80%
Medicare(2)
70%
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
Includes Medicaid Disproportionate Share payments.
(2)
Includes Medicare Disproportionate Share payments.
Billions
Chart 4.7: Hospital Payment Shortfall Relative to Costs for Medicare,
Medicaid and Other Government, 1997 – 2013(1)
$5
$0
-$5
-$10
-$15
-$20
-$25
-$30
-$35
-$40
-$45
-$50
-$55
-$60
Medicare
Medicaid
Other Government
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
Costs reflect a cap of 1.0 on the cost-to-charge ratio.
Chart 4.8: Income from Investments and Other Non-operating Gains(1) as
a Percentage of Total Net Revenue, 1993 – 2013
Percentage of Total Net Revenue
3.2%
2.4%
1.6%
0.8%
0.0%
-0.8%
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2013, for community hospitals.
(1)
Non-operating gains include income from non-operating activities, including investments, endowments and
extraordinary gains, as well as the value of non-realized gains from investments.
Chart 4.9: Number of Bond Rating Upgrades and Downgrades,
Not-for-profit Health Care, 1994 – 2014
70
50
30
Upgrades
10
Downgrades
-10
-30
-50
-70
(1)
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Source: Moody’s Investors Services. Moody's: Public Finance Upgrades Outperform in Fourth Quarter; Downgrades Prevail in
2014. February 10, 2015.
(1)
Data for 2013 not publicly available
Chart 4.10: Median Average Age of Plant, 1993 – 2013
12
10
10.1 10.3 10.1 10.2
9.7 9.8 9.8 9.8 9.9 9.8 9.8 9.6 9.8
9.4
9.2 9.3 9.2
8.8 8.9
8.0
8.4
Years
8
6
4
2
0
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Optum, Almanac of Hospital Financial and Operating Indicators, 2005, 2008, 2009, 2010, 2011, 2013, 2014 and 2015 and CHIPS,
The Almanac of Hospital and Financial Operating Indicators, 1994 and 1996-7.
Chart 4.11: Percent Change in Employment Cost Index(1), All Private
Service Industries, All Health Services and Hospitals,
2005 – 2014(2)
5%
Hospitals
All Health Services
4%
3%
All Private Service
Industries
2%
1%
0%
05
06
07
08
09
10
11
12
13
Source: Bureau of Labor Statistics, Employment Cost Index, 12 months ending December 2014. Link: www.bls.gov.
(1)
Total compensation.
(2)
Data represent annualized 12 month percent change.
14