Hospitals had a challenging financial year in 2022 as expenses skyrocketed without a similar lift in revenue and reimbursement. But there are signs of improvement through the first half of 2023.
Below are hospital financial benchmarks based on reports from ratings firms including Moody's Investment Services, S&P 500, and Fitch. The data also includes information gathered by Kaiser Family Foundation and Kaufman Hall, based on the most recent reports available.
Key ratios
Source: Moody's Investors Service, "Medians - Operating performance weakens as tough expense environment persists." The report was released Sept. 7, 2023 and includes data from freestanding hospitals, single-state and multistate healthcare systems for the 2022 fiscal year.
1. Operating margin: -0.3 percent
2. Excess margin: 2.4 percent
3. Operating cash flow margin: 4.9 percent
4. Return on assets: 1.7 percent
5. Three-year operating revenue CAGR: 6.5 percent
6. Three-year operating expense CAGR: 7.7 percent
7. Cash on hand: 205.6 days
8. Annual operating revenue growth rate:
9. Annual operating expense growth rate:
10. Total debt-to-capitalization: 31.9 percent
11. Total debt-to-operating revenue: 31 percent
12. Current ratio: 1.7x
13. Cushion ratio: 24.9x
14. Annual debt service coverage: 4.0x
15. Maximum annual debt service coverage: 3.6x
16. Total debt-to-cash flow: 3.6x
17. Capital spending ratio: 1.1x
Revenue cycle
18. Accounts receivable: 48 days
19. Average payment period: 69.4 days
20. Average age of plant: 12.7 years
21. Total Medicare: 47.1 percent
22. Total Medicaid: 16.6 percent
23. Total Commercial: 31.5 percent
24. Self-pay and other: 5 percent
25. Excess of revenue over expenses: $32.6 million
Revenue and expenses
Source: Kaufman Hall Hospital Flash Report August 2023, numbers represent growth from the first seven months of 2022 compared to the first seven months of 2023.
26. Inpatient revenue per calendar day: 4 percent
27. Outpatient revenue per calendar day: 12 percent
28. Inpatient / Outpatient Adjustment Factor: 4 percent
29. Total expenses per calendar day: 3 percent
30. Labor expenses per calendar day: flat
31. Non-labor expenses per calendar day: 6 percent
32. Supply expenses per calendar day: 6 percent
33. Average length of stay: -4 percent
34. ED visits per calendar day: 4 percent
Source: S&P Global Ratings "U.S. Not-For-Profit Health Care System Median Financial Ratios - 2022," the most recent data available.
35. Net patient revenue: $3.1 billion
36. Total operating revenue: $3.6 billion
37. Total operating expenses: $3.6 billion
38. Operating income: -$12 million
39. Operating margin: -0.4 percent
40. EBIDA margin: 6.1 percent
41. Average age of plant: 11.9 years
42. Total long-term debt: $1.2 billion
43. Salaries and benefits / net patient revenue: 60.4 percent
44. Nonoperating revenue / total revenue: 1.5 percent
45. Cushion ratio: 25.6x
46. Days in accounts receivable: 47.4 days
47. Cash flow / total liabilities: 8.8 percent
AA+ rating
48. Operating revenue: $5.4 billion
49. Net patient revenue: $5.2 billion
50. Operating income: $115.4 million
51. Operating margin: 1.2 percent
52. Operating EBIDA margin: 8.6x
53. Excess margin: 4.6 percent
54. EBIDA margin: 10.7 percent
AA rating
55. Operating revenue: $6 billion
56. Net patient revenue: $5.2 billion
57. Operating income: $44 million
58. Operating margin: 1.1 percent
59. Operating EBIDA margin: 6.2 percent
60. Excess margin: 3.8 percent
61. EBIDA margin: 8.9 percent
AA- rating
62. Operating revenue: $4.9 billion
63. Net patient revenue: $4 billion
64. Operating income: -$45.6 million
65. Operating margin: -0.9 percent
66. Operating EBIDA margin: 5.0 percent
67. Excess margin: 1.2 percent
68. EBIDA margin: 6.7 percent
A+ rating
69. Operating revenue: $3.1 billion
70. Net patient revenue: $2.7 billion
71. Operating income: $12.8 million
72. Operating margin: 0.4 percent
73. Operating EBIDA margin: 5.5 percent
74. Excess margin: 1.8 percent
75. EBIDA margin: 6.8 percent
A rating
76. Operating revenue: $3.6 billion
77. Net patient revenue: $3.1 billion
78. Operating income: -$31.1 million
79. Operating margin: -1.2 percent
80. Operating EBIDA margin: 4 percent
81. Excess margin: 0.3 percent
82. EBIDA margin: 5.4 percent
A- rating
83. Operating revenue: $2.5 billion
84. Net patient revenue: $2.2 billion
85. Operating income: $13.2 million
86. Operating margin: 0.5 percent
87. Operating EBIDA margin: 5.7 percent
88. Excess margin: 0.9 percent
89. EBIDA margin: 6.0 percent
Average adjusted expenses per inpatient day
Source: Kaiser State Health Facts, based on data accessed in 2021 and published in 2022.
90. Nonprofit hospitals: $3,013
91. For-profit hospitals: $2,296
92. State/local government hospitals: $2,742
Debt
Source: Fitch Ratings, data from nonprofit hospitals and health systems in 2022. The report was accessed July 2023.
93. Personnel cost as a percentage of total operating revenue: 54.3 percent
94. EBITDA margin: 7.3 percent
95. Maximum annual debt service as a percentage of revenues: 2.2 percent
96. Debt to EBITDA: 4.2x
97. Debt to capitalization: 34.2 percent
98. Capital expenditures as a percent of depreciation expense: 109.5 percent
99. Days in current liabilities: 69.6 days
100. Cash to adjusted debt: 143.4 percent