Chart 4.1: Percentage of Hospitals with Negative Total and Operating
Margins, 1995 – 2011
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
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2011, for community hospitals.
10
11
Chart 4.2: Aggregate Total Hospital Margins,(1) Operating Margins(2)
and Patient Margins,(3) 1991 – 2011
8%
Total Margin
6%
4%
Operating Margin
2%
0%
Patient Margin
-2%
-4%
-6%
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2011, 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.
(3)
Patient Margin is calculated as the difference between net patient revenue and total expenses divided
by net patient revenue.
11
Chart 4.3: Distribution of Outpatient vs. Inpatient Revenues, 1991 – 2011
100%
90%
Percentage of Revenue
80%
Gross Inpatient
Revenue
70%
60%
50%
40%
30%
Gross Outpatient
Revenue
20%
10%
0%
91 92 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, 2011, for community hospitals.
Chart 4.4: Annual Change in Hospital Operating Revenue and Expenses
per Adjusted Admission,(1) 1991 – 2011
18%
Change in Total Expenses
Change in Operating Revenue
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
91 92 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, 2011, 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
2011
Uncompensated
Care,(2) 5.1%
Non-patient,(1) 2.8%
Uncompensated
Care,(2) 6.0%
Private Payer, 41.8%
Private Payer, 38.7%
Non-patient,(1) 2.7%
Non-patient,(1) 2.1%
Uncompensated
Care,(2) 5.9%
Private Payer, 34.6%
Other Government,
1.8%
Other Government,
1.4%
Other Government,
6.1%
Medicaid, 16.3%
Medicaid, 12.8%
Medicaid, 9.6%
Medicare, 39.3%
Medicare, 38.3%
Medicare, 34.6%
1980
2000
2011
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2011, 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.
Chart 4.6: Aggregate Hospital Payment-to-cost Ratios for Private Payers,
Medicare and Medicaid, 1991 – 2011
140%
Private Payer
130%
120%
110%
100%
Medicare(1)
90%
Medicaid(2 )
80%
70%
91 92 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, 2011, for community hospitals.
(1)
Includes Medicare Disproportionate Share payments.
(2)
Includes Medicaid Disproportionate Share payments.
Chart 4.7: Hospital Payment Shortfall Relative to Costs for Medicare,
Medicaid and Other Government, 1997 – 2011(1)
$5
$0
-$5
Medicare
Billions
-$10
Medicaid
-$15
Other Government
-$20
-$25
-$30
-$35
-$40
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, 2011, 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, 1991 – 2011
Percentage of Total Net Revenue
3.2%
2.4%
1.6%
0.8%
0.0%
-0.8%
91 92 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, 2011, 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 – 2012
70
50
30
Upgrades
10
Downgrades
10
30
50
70
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
Source: Moody’s Investors Services. Moody's: 2012 Not-for-Profit Healthcare Sets New Record in Downgraded Debt.
February 12, 2013.
12
Chart 4.10: Median Average Age of Plant, 1991 – 2011
12
10
8
9.7 9.8 9.8 9.8 9.9 9.8 9.8 9.6 9.8 9.9
9.3 9.2 9.4
9.2
8.6 8.8 8.9
8.0 8.4
10.3
Years
8
6
4
2
0
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Source: Optum/Ingenix, Almanac of Hospital Financial and Operating Indicators, 2005, 2008, 2009, 2010, 2011, and
2012 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, 2003 – 2012(2)
4%
3.1%
2.9%
3%
2.7%
2%
All Private Service Industries
All Health Services
Hospitals
Source: Bureau of Labor Statistics, Employment Cost Index, 12 months ending December 2012. Link: www.bls.gov.
(1)
Total compensation.
(2)
Data represent ten-year average.