With healthcare consolidation continuing, 34% of the 5,300 hospitals in the U.S., are part of the largest health systems (those with 10 or more hospitals). Still, the acute market is relatively fragmented compared to many other industries, and much more consolidation is expected in the coming years.
Nearly 60% of hospitals are not-for-profit. Community hospitals make up the largest segment by far, with 4,926 facilities and 787,000 beds. Almost all facilities are seeing a decline ininpatient admissions while outpatient visits increase.
Financially, hospital financial performance has been improving. The average aggregate margin was 8% in 2013. However, some 30% of hospitals still have a negative operating margin and 25% have a negative total margin.
Hospital executives continue to focus on supply savings in response to rising overall expenses; 97% belong to a group purchasing organization (GPO).
Acute care executives are trying many strategies for responding to reimbursement and market pressures. Some have entered the insurance business, with the number of enrollees in provider-owned insurance plans growing at about 6% annually. Hospitals are also increasing their focus on outcomes improvement. Readmissions rates are declining, as are healthcare-acquired conditions (HACs).
Innovations in the acute care segment include a growing number of free-standing emergency rooms, micro hospitals, and enhanced recovery programs.
The Centers for Medicare and Medicaid Services (CMS) continues to roll out programs aimed at improving qualities and reducing costs for hospital care. Most recently, CMS introduced a new mandatory bundled-payment initiative for joint replacements. Penalties for excessive HAC and readmission rates are increasing.
GHX Sales Data
Total sales of medical products through distribution, as reported by GHX Market Intelligence, increased 3.94% from 2014 to 2015. Acute care represented 60.17% of total healthcare sales through distribution, down just slightly from 60.93% in 2014.
Parenteral products comprised the largest category in terms of sales dollars.