Hospital Financial Performance Improving

In August, the Center for Healthcare Improvement issued their quarterly report reviewing the hospital marketplace. This report analyzed current financial and operational data through the first quarter of 2009. The overall findings of this report suggest that hospital operations and financial performance are improving as a result of several positive trends.

In general, Quarters 3 and 4 in 2008 saw many indicators spike negatively as the economy declined deeper into recession. For example, the percentage of hospitals operating with negative margins in Q3 2008 was over 50%, approximately 48% in Q4 2008, and then returned to more typical 30% levels in Q1 2009. (Since a large portion of hospitals are non-profit, margins are used as opposed to profit figures.)

In addition to declining margins, median days of cash reserves were at approximately 90 days. To compensate for declining cash flow, hospitals held expense growth to close to 0% in the first quarter 2009, largely in part through managing labor expenses.

For a complete copy of this report, please contact Cooper Research by clicking on the "contact us" link.

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