Proof that financial issues in the healthcare industry go up and down lies in the fact that currently, quite a few hospitals are going through a profitable period. Since nothing is for certain, it’s always a good idea to stay ahead of your aged claims and make sure that you’re collecting on them, should the financial trend go back to a neutral or negative state. You need to be prepared. In the meantime, here’s the latest in profitability trends.
Hospital Profitability
According to the experts, “increased patient volumes, lower bad debt and reduced expenses, led to strong operating profitability for hospitals in October, according to a National Hospital Flash Report from consulting firm Kaufman Hall. Hospitals’ median operating earnings before interest, taxes, depreciation and amortization margin was up 20 percent month over month in October and 6 percent year over year.”
They go on to state that, “Median operating margins for hospitals rose 34.8 percent month over month, and rose 10.4 percent year over year. In addition, hospitals saw modest revenue gains in October. Net patient service revenue per patient discharge rose 1.5 percent year over year and 1.2 percent year over year.”
More proof of this trend shows that, “The modest revenue increase was coupled with decreases in bad debt and charity care. The percent of uncompensated care as a percent of gross revenue in October decreased 4.8 percent year over year. The strong operating performance for the hospital sector was also attributed to an increase in patient volume, which the firm said is likely a result of seasonal illnesses.”
The Cleveland Clinic Example
Along with hospitals around the country seeing their profitability rise, the Cleveland Clinic has seen some growth as well. The experts stated, “Cleveland Clinic’s revenues climbed to $2.6 billion in the third quarter of this year, up 18 percent from $2.2 billion in the same period of 2018. The boost was largely attributable to higher net patient service revenue.”
They went on to explain, “The system’s operating expenses were up 16.8 percent year over year in the third quarter of 2019. Expenses grew across several categories, including supplies, pharmaceuticals, and salaries, benefits and wages. Higher patient volumes primarily drove the increases, Cleveland Clinic said.”
To be more specific, “Cleveland Clinic ended the third quarter of 2019 with an operating income of $115.2 million, up 65 percent from $69.8 million in the third quarter of last year. The system’s operating margin was 4.4 percent, compared to an operating margin of 3.1 percent in the same period of 2018.”
Collecting on Aged Claims
Remember that no matter where your hospital is financially, it’s always a good idea to collect on your aged claims – those that have gone through the ERISA appeals process. Contacting an expert company, such as ours, can help you remain on a good financial path, because those aged claims, no matter how small their numbers may be, can help keep your hospital on good ground. Give us a call today or fill out our contact form to see how we can help.