November 2019
Profitability
EBITDA Margin by Region *
All regions saw Operating EBITDA Margin up year over year and most were favorable to budget in October. These increases are primarily driven by favorable increases in inpatient and surgical volumes. The Northeast/Mid-Atlantic saw the greatest year-over-year increase, up 26.7 percent or 246.3 bps compared to October 2018, but just 0.6 percent or 11.4 bps above budget. This region of the country benefited from strong improvements in volume-adjusted revenue, and a more than 11 percent reduction in Bad Debt and Charity Care as a Percent of Gross. Meanwhile, the West saw the biggest increase over budget at 15.5 percent or 161.1 bps, but rose just 0.6 percent or 7.5 bps year over year. The Midwest was the only region to perform below budget. However, this area of the country continues to maintain stable performance as a result of strong labor expense management.
% Change
Absolute Change
National Profitability Observations
Operating performance was strong at hospitals across the country in October, with margins increasing across the board. Month-over-month performance was particularly robust. Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margin was up 20 percent or 250.1 basis points (bps) month over month, while Operating Margin was up 34.8 percent or 285.7 bps. Operating EBITDA Margin was up 6 percent or 85.1 bps year over year, and performed 2.6 percent or 44.4 bps above budget expectations. Operating Margin rose 10.4 percent or 86.2 bps year over year, and was up 7.4 percent or 68.5 bps compared to budget. Contributing factors include increased volumes, modest revenue gains, lower Bad Debt and Charity care, and decreases across most expense metrics for the month.
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
2.6%
20.0%
6.0%
Operating_EBITDA_Margin.svg
Operating Margin
7.4%
34.8%
10.4%
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
44.4
250.1
85.1
Operating_EBITDA_Margin_Abs.svg
Operating Margin
68.5
285.7
86.2
Operating_Margin_Abs.svg
EBITDA Margin by Bed Size
The nation’s smallest hospitals with 0-25 beds saw the most significant increases in Operating EBITDA Margin in October, up 15.3 percent or 138.2 bps year over year and 6.3 percent or 45.3 bps to budget. By contrast, the nation’s largest hospitals fell -1.9 percent or -16.5 bps compared to the same period last year. This is the fourth consecutive month that hospitals with more than 500 beds experienced declining revenue, driven primary by softening outpatient and emergency department volumes, mixed with a nearly 5 percent increase in Bad Debt and Charity care.
All other bed-size cohorts saw year-over-year increases ranging from 5.4 percent to 7.4 percent. Mid-sized hospitals with 200-299 beds experienced the lowest variance to budget at about 0.6 percent.
% Change
Absolute Change
©2019 Kaufman, Hall & Associates, LLC
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