AHA: Hospitals' Profits Plunge in 2008

John Commins and Les Masterson, November 11, 2009

The nation's 5,010 nonfederal community hospitals saw profits fall to $17 billion in recession-wracked 2008, thanks in large part to investment portfolio losses that accounted for $4.4 billion in red ink, according to the newly released 2010 AHA Hospital Statistics guide.

Hospitals reported total net revenue of $643.6 billion while claiming total expenses of $626.6 billion, for a net gain of about $17 billion in 2008, according to the survey, which was compiled by AHA's Health Forum with data gleaned from all AHA-registered hospitals.

In 2007, bolstered by a record $17 billion in investment income, hospitals reported net revenues of $626.3 billion against total expenses of $583.2 billion for net profits of $43.1 billion, the survey reported.

The survey also reported that hospital admissions grew to 35.8 million in 2008, an increase of more than 400,000 when compared with 2007, while inpatient days hit more than 196 million, an increase of more than 1.5 million when compared with 2007. The average length of stay has remained flat at 5.5 days for at least the last five years. More than 10.1 million inpatient surgeries were reported in 2008, a decrease of 84,474 surgeries when compared with 2007.

The survey also showed that full-time hospital personnel increased by about 80,000 positions, while part-time employees grew by about 20,000 between 2007 and 2008. The Bureau of Labor Statistics recently reported that the hospital sector has reported about 37,000 new payroll additions so far this year with nearly half of those additions coming within the last two months.

The AHA survey reflects data from 2008. Since then, however, there have been encouraging signs that hospitals may be on the rebound. In addition to the recent spate of payroll additions reported by BLS, a new study by Thomson Reuters shows that 80% of the nation's hospitals were back in black in the second quarter of 2009. In the third quarter of 2008, more than half of all hospitals reported that they were losing money.

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