September 2018
Predictions for Next Month
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Regional Predictions ?
Most regions are predicting that performance will be higher than last year, similar to the national composite. Performance relative to budget, however, is split—with coastal regions expecting to be lower than the previous month, and other regions expecting to be higher. The Great Plains region continues to be an outlier, with unfavorable year-over-year performance projections, likely due to mounting pressures for small rural providers.
% Change
Absolute Change
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Absolute Change
National Profitability Predictions
Nationally, profitability budgets next month are slightly up from August and predicted to be slightly up from last year. Although budgets continue to predict slightly higher EBITDA margins over July and last year, the anticipated margin improvement is significantly less than in the prior months. EBITDA Margin improved only 6 bps month over month, while Operating Margin rose 28 bps. This illustrates the continued trend of rising depreciation pressures. Year-over-year EBITDA and Operating Margin predictions are more favorable, at around 175 bps. Given relatively low hospital margins, however, this doesn’t signify major operational changes. A trend of strong performance seen in recent months appears to be shifting.
Unless noted, figures are actuals and medians expressed as percentage change
Unless noted, figures are actuals and medians expressed in basis points
Month Over Month
Year Over Year
Year Over Year Distributions (Click to enlarge)
Operating EBITDA Margin
1.4%
21.8%
Operating Margin
3.3%
20.7%
Month Over Month
Year Over Year
Year Over Year Distributions (Click to enlarge)
Operating EBITDA Margin
6.0
174.0
Operating Margin
28.0
175.0
Profitability Prediction % Change
Profitability Prediction Absolute Change
By Region
National Predictions
By Bed Size
Resources and Comments
Bed Size Predictions
Profitability expectations for next month by bed size demonstrate some interesting findings. Both the largest and smallest bed-size cohorts expect to see year-over-year declines, while mid-size hospitals expect increases. Trends in recent months have demonstrated that both the largest and smallest hospitals tend to be more inflexible from a cost perspective, so the unfavorable year-over-year expectations may be a natural progression of the increasing LOS demonstrated in July.
Hospitals of all sizes, with the exception of the smallest cohort, have expectations to improve cost performance over the previous month. Mounting pressures for the smallest providers may be driving this change, as well as the direct correlation of volumes to profitability and the floor the smallest providers face in trying to flex expenses down to core levels.
% Change
Absolute Change
% Change
Absolute Change
By Region
National Predictions
By Bed Size
Resources and Comments
©2018 Kaufman, Hall & Associates, LLC
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