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How hospitals can tackle the profitability crisis

September 11, 2018 Article 2 min read
Authors:
Tony Colarossi
Profitability is at its lowest point for hospitals since before the recession. There are steps that hospital administrators need to take today in order to withstand an economic slowdown. Read more in Becker's Hospital CFO Report.

A picture of a hospital staff doing research on a computer

The profitability of U.S. hospitals is at its lowest level since the 2008 financial crisis, increasing the urgency for health systems to undertake significant efforts to tackle their high fixed costs.

The challenge facing hospitals was recently underscored in a report by Moody's Investors Service that revealed that median operating cash-flow margins, a key measure of profitability for both not-for-profit and public hospitals, declined to 8.1 percent in 2017 from 9.5 percent a year earlier. At the same time, the growth of expenses was faster than revenue growth.

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