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June 2019
Predictions for Next Month
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Regional Predictions ?
Regionally, most areas of the country expect an increase in margins in line with the national observations. The exceptions are the Northeast/Mid-Atlantic and Great Plains regions. As noted earlier in this issue, the Great Plains’ regional performance is highly dependent upon volumes, as many of the hospitals in that region are quite small. These hospitals often take a more conservative approach to budgeting.
Hospitals in the Midwest expect to see the greatest increase in both year-over-year and month-over-month performance for Operating EBITDA Margin, indicating the aggressive nature of budgeting for organizations in that region.
% Change
Absolute Change
% Change
Absolute Change
National Profitability Predictions
Nationally, margin performance in July is predicted to be a stronger compared to the same period last year, with Operating Margin expected to increase 145 bps and EBITDA Margin expected to increase 284 bps. Interestingly, Operating Margin is predicted to decrease month over month, while EBITDA Margin is budgeted to increase month over month. This indicates the continued trend of increasing expenses from depreciation. The spread of performance is similar to that observed in past months, although the overall distribution of margin performance skews towards the favorable.
Unless noted, figures are actuals and medians expressed as percentage change
Unless noted, figures are actuals and medians expressed in basis points
Month Over Month
Year Over Year
Year Over Year Distributions (Click to enlarge)
Operating EBITDA Margin
4.0%
24.3%
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Operating Margin
(6.5%)
23.0%
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Month Over Month
Year Over Year
Year Over Year Distributions (Click to enlarge)
Operating EBITDA Margin
63.5
284.0
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Operating Margin
(28.0)
145.0
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Profitability Prediction % Change
Profitability Prediction Absolute Change
By Region
National Predictions
By Bed Size
Resources and Comments
Bed Size Predictions
Similar to the national trends, most bed-size cohorts predict increased margin performance for July relative to the prior month and July 2018. The largest hospitals (500 beds and more) are an exception, as they anticipate a slight year-over-year decrease in Operating EBITDA Margin by basis points.
The smallest hospitals (0-25 beds) predict to see the highest level of year-over-year margin growth, which is interesting when contrasted with the performance of the Great Plains region, which consists predominately of small hospitals. This suggests that pressure for the Great Plains is both bed-size and regionally dependent. Hospitals with 300-499 beds expect the greatest month-over-month growth, but similar year-over-year performance relative to most other bed-size cohorts.
% Change
Absolute Change
% Change
Absolute Change
By Region
National Predictions
By Bed Size
Resources and Comments
©2019 Kaufman, Hall & Associates, LLC
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