November 2018
Profitability
ic_arrow_up.svg
Hide Page Sections
ic_arrow_drop_down_black_24px.svg
Show Page Sections
EBITDA Margin by Region ?
Nearly all regions of the U.S. experienced year-over-year increases in EBITDA Margin, with the exception of the Northeast/Mid-Atlantic, which experienced almost no change. The Midwest region experienced the greatest profitability gains for the third consecutive month, with a 400 bps year-over-year increase in profitability. This solid performance was driven by modest revenue growth along with sound cost management.
% Change
Absolute Change
% Change
Absolute Change
National Profitability Observations
U.S. hospitals unexpectedly returned to favorable profitability trends in October. October marks five out of the past six months of favorable profitability trends. The industry outperformed monthly budgets, last month’s performance, and last year’s outcomes. Specifically, hospitals performed favorably by more than 225 bps for both EBITDA and Operating Margin compared to last month, and by more than 125 bps compared to 2017. Several factors contributed to the improvements:
  • Month-over-month and year-over-year increases in adjusted discharges and surgical volumes, along with modest improvements in average lengths of stay
  • Moderate revenue improvements
  • Decreases in bad debt and charity care
  • Strong management of labor and purchased services expenses, despite rising medical supply and pharmaceutical costs
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
3.4%
19.6%
9.8%
ebitda_percent.svg
Operating Margin
9.6%
46.5%
20.9%
op_margin_percent.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
69.0
229.0
134.0
ebitda_diff.svg
Operating Margin
86.5
257.5
139.5
op_margin_diff.svg
By Region
National Observations
By Bed Size
EBITDA Margin by Bed Size
As with previous months, there seems to be little correlation between hospital bed size and profitability. The nation’s largest hospitals are the only exception. For the past four months, hospitals with >500 beds are underperforming in profitability. These large institutions underperformed their EBITDA budget by more than 50 bps in October, driven by their inability to manage expenses as well as smaller hospitals. Conversely, organizations with 200-299 beds experienced the largest year-over-year improvements in profitability, with a more than 400 bps increase in EBIDTA.
% Change
Absolute Change
% Change
Absolute Change
By Region
National Observations
By Bed Size
©2018 Kaufman, Hall & Associates, LLC
You have ${pages_left} free articles remaining.
Subscribe now to continue getting the industry’s most current and thoughtful review of hospital performance.
scroll_up.svg
kha_logo.svg
National Hospital Flash Report
menu_icon.svg
mail.svg
Share article
Sign up now for access to the latest news and reports
SUBMIT