While hospital profits increased for the third straight year in 1992 partly because of more efficient operations and savings from refinancings, the financial health of the industry is uncertain, according to a study released in late October.
"The Comparative Performance of U.S. Hospitals: The Sourcebook," compiled jointly by HCIA Inc. and Deloitte & Touche, reports that the median profit margin for all U.S. hospitals last year was 4.51%, up from 3.76% the previous year.
Increased profits last year resulted from operating efficiencies, including the use of automated billing and collection services and reductions in staffing levels and salary benefits, said HCIA editor Suzanne Zeuschner in a press release.
A large wave of refinancings that reduced debt service obligations coupled with a slowdown in capital expenditures also improved overall profitability in 1992, Zeuschner said.
Despite the improvements, the study says hospital finances will face stress in the coming years from declines in patient occupancy and admission rates and increases in Medicaid and Medicare patients.
Michael Engelhart, a partner at Deloitte & Touche, said in the release that reliance on Medicare and Medicaid is unfavorable because "of less generous" reimbursement patterns and the likelihood of cuts in those programs resulting from health-care reforms.
HCIA is a Baltimore-based health-care information company. Deloitte & Touche is an international accounting and consulting firm.
