US Hospital Profits Rise 9 Percent – OpEd


This week’s Quarterly Services Survey (QSS), published by the Census Bureau, reported some interesting data:

The estimate of U.S. health care and social assistance revenue for the second quarter of 2015, not adjusted for seasonal variation, or price changes, was $591.3 billion, an increase of 2.2 percent (± 0.8%) from the first quarter of 2015 and up 6.4 percent (± 1.3%) from the second quarter of 2014. The fourth quarter of 2014 to first quarter of 2015 percent change was revised from -0.4 percent (± 1.1%) to -0.5 percent (± 1.1%).

The QSS adds important information to the more widely reported quarterly Gross Domestic Product (GDP) and Employment Situation Summary (ESS) releases that I frequently discuss on the blog.

Examining the detailed tables, revenues of health facilities, net of social services, increased to $550.0 billion in Q2 versus $516.6 billion in 2014 Q2, an increase of 6.07 percent. What is important about the QSS is that it reports both revenue and expenses for the facilities. Expenses grew to $502.2 billion from $472.9 billion, or 5.84 percent. That is, gross margins in health services increased.

The increase in profitability was especially noticeable in hospitals. Hospitals’ net revenue (revenue less expenses) per inpatient day increased to $351 from $321, an increase of 8.33 percent. Net revenue per discharge increased to $2,129 from $1,937, an increase of 9.03 percent.

Truly, hospitals are Obamacare’s big winners.

This article was published at The Beacon

John C. Goodman

John C. Goodman is President of the Goodman Institute and Senior Fellow at The Independent Institute. His books include the widely acclaimed A Better Choice: Healthcare Solutions for America and the award-winning Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.”

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