January 2020
Profitability
EBITDA Margin by Region *
Operating EBITDA Margin was up year over year across all regions in December, due in large part to volume increases across most metrics and higher year-over year Net Patient Service Revenues per Adjusted Discharge. The upturn comes after a dip in performance across all regions in November. The Midwest saw the greatest year-over-year increase at 21.9 percent or 326.0 bps, but was the only region to perform below budget expectations at -4.1 or -44.8 bps to budget.
All other regions were above budget, with year-over-year increases ranging from 11.8 percent (173.0 bps) in the Northeast/Mid-Atlantic, to 2.8 percent (51.9 bps) in the West. While the West saw the lowest year-over-year increase, it had the greatest positive variance to budget at 8.5 percent, or 193.6 bps. Even so, the region has consistently seen some of the lowest levels of year-over-year margin variance—both positive and negative—compared to other areas of the country since about April 2019.
% Change
Absolute Change
National Profitability Observations
Hospitals across the country closed the 2019 calendar year with an uptick in margin results for the month of December, following significant declines in November. Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margin rose 7.7 percent year over year or 136.9 basis points (bps), and Operating Margin increased 18 percent or 171.8 bps.
Compared to November 2019, Operating EBITDA Margin increased 17.4 percent or 173.4 bps, and Operating Margin rose 21.7 percent or 208.7 bps. Operating EBITDA Margin was 2.9 percent (36.2 bps) compared to budget for December, and Operating Margin was 10.2 percent (72.1 bps) to budget.
Multiple factors contributed to the margin increases, including higher volumes and revenues, despite increases in Bad Debt and Charity care and mixed performance on expenses.
Unless noted, figures are actuals and medians expressed as percentage change
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Operating EBITDA Margin
2.9%
17.4%
7.7%
operating_ebitda_margin.svg
Operating Margin
10.2%
21.7%
18.0%
operating_margin.svg
Unless noted, figures are actuals and medians expressed in basis points
Profitability % Change
Profitability Absolute Change
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Operating EBITDA Margin
36.2
173.4
136.9
operating_ebitda_margin_abs.svg
Operating Margin
72.1
208.7
171.8
operating_margin_abs.svg
EBITDA Margin by Bed Size
Hospitals across all bed-size cohorts saw year-over-year increases in Operating EBITDA Margin. Contributing factors included increased volumes, particularly in Adjusted Discharges, Emergency Department Visits, and Operating Room Minutes. Hospitals with 26-99 beds saw the greatest increase at 22.0 percent or 298.0 bps, while those with 300-499 beds saw the least increase at 5.2 percent or 65.6 bps.
Hospitals with 500 beds or more was the only cohort to perform below budget expectations. The cohort saw Operating EBITDA Margin increase 8.5 percent or 85.0 bps year over year, but fall -2.4 percent or -47.1 bps below budget. It was the first year-over-year increase for the cohort in the past six months.
The nation’s smallest hospitals with 0-25 beds had Operating EBITDA Margin increase 8.4 percent or 182.3 bps year over year, and performed 21.1 percent or 197.7 bps to budget.
% Change
Absolute Change
©2020 Kaufman, Hall & Associates, LLC
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