HIDA Hospitals & Health Systems Market Report

HIDA Hospitals & Health Systems Market Report

Executive SummaryMarket-At-A-GlanceIn 2019, hospitals are expected to account for the largest share of healthcare expenditures at 33%($1.3 trillion). From 2018 to 2019, hospital expenditures grew 5.1%, driven largely by increasedMedicare and Medicaid spending. By 2027, U.S. spend on hospitals is expected to reach $2 trillion.As of 2019, there were an estimated 6,210 hospitals nationwide.Many Hospitals Struggle To Remain ProfitableIn 2018, median for-profit hospital operating margins were estimated at 1.8%, lower than the 2.5%that investors consider healthy. Much of this is attributed to continued erosion of the payer mix. In2019, Medicare and private health insurance are estimated to reach 25% and 39% of the payer mixrespectively. By 2028, Medicare’s share of the payer mix is expected to increase to 29% whileprivate payers’ share is projected to decline to 37%.This could potentially challenge hospitals as Medicare is increasingly subject to regulatory demands,many of which, such as the Hospital Acquired Conditions Reduction Program, come with financialpenalties. In 2017, hospital Medicare margins averaged -9.9%, down from -9.7% the year prior.As of 2019, one-fifth of U.S. hospitals were considered to be at high financial risk and wereconsidered likely to close unless their situations improved.2019 Outlook For Nonprofit Hospitals NegativeRevenues for nonprofit hospitals are expected to grow 3-4% in 2019 while expenses are projected toincrease 4-5%. While growth in expenses is slower than in prior years, revenues continue to lag.Contributors to the negative outlook include:• Low Medicare reimbursement rates• Increases in the number of Medicare patients as the population ages• Nursing shortages• Rising wages• Specialty drug costs• New technology costsHospitals Continue To Pursue Physician EmploymentIn 2016, 155,000 (41.7%) of physicians were employed by hospitals. This figure has steadilyincreased from 26% in 2012. Estimates for 2018 reinforce the trend, with 169,000 (44%) ofphysicians employed by hospitals.

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Executive Summary
U.S. Spending On Hospital Services Projected To Reach $2 Trillion By 2027
Hospitals Reach One-Third Of National Health Expenditures In 2019
National Health Expenditures Projected To Reach $6.0 Trillion By 2027
Spending Growth On Hospital Services Slows
Slower Growth In Providers’ Costs To Treat Patients
U.S. Hospitals By The Numbers, 2019
Hospitals And Health Systems Say Reducing Operating Costs Is Critical To Success
One-Fifth Of Rural Hospitals Face High Financial Risk
Nonprofit Hospitals Face Negative Outlook In 2019
Majority Of Hospital, Health System Executives Report Supply Budget Increases
Medical Supplies Expected To Pass Labor As The Number One Hospital Expense By 2020
Hospital Medicare Margins Remain Negative
Payer Mix Erosion Projected To Affect Hospitals
Health System Margins Drop 39% From 2015–2017
Health System Margins Vary By Geographical Region
Inpatient Admissions To Remain Flat Through 2028
Outpatient Visits Increase, Inpatient Discharges Decrease For Medicare Patients
Endovascular Surgeries Had The Largest Inpatient Volume Growth 2008-2018
Outpatient Volume Growth Projected
Volume Growth Estimated To Occur In Outpatient Setting
Outpatient Revenues Make Up Nearly Half Of Hospital Earnings
Aging Population Chief Contributor To Outpatient Volume Growth
Observational Care, Drug Costs Had The Largest Outpatient Medicare Spending Increases From 2012–2017 . . .18
Diagnostics Services Top List Of Hospital Outpatient Procedures By Volume
Knee Replacement Surgery Had Largest Outpatient Volume Growth 2008-2018
ER Accounts For 25% Of Hospital Revenues, But Growth Is Slowing
Hospitals Employ Nearly Half Of Healthcare Workers
Hospitals Nurses Earn More Than The Industry Average Nurse Salary
Average Turnover For Nurses Is Lower Than That Of Other Employees
Hospital Nurse Vacancies Are On The Rise
Turnover Highest Among ER Nurses
44% Of Physicians Were Employed By Hospitals In 2018
Hospitals Embrace Mobile Technologies
Hospitals Uncover New Technology Challenges
10% Of Hospitals Report Medical Device Cybersecurity Incident In 2018
Health Systems Struggle To Standardize Supply Chain
Acute Providers Look For Services, Convenience When Selecting A Distributor
Hospitals And Health Systems Say Cost Reduction, Order Fulfillment Important In Supply Chain Partnership .27
Hospital M&A, Construction Appear To Slow
Physician Offices Remain The Leading Target For Acquisition
800 Hospitals Penalized Under Hospital Acquired Conditions Reduction Program In FY 2019
Hospital Readmissions Reduction Program Largely Successful In Achieving Goals
Health Systems Slow To Adopt Payment Models Tied To Outcomes
GHX Reports $27.5 Billion In Hospital Sales Through Distribution In 2018
GHX Lists Top Hospital Products Sold Through Distribution

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