Major U.S. health systems on average saw better operating margins last year, but many organizations still have work to do to surpass 2015 levels, according to an analysis from global professional services firm Navigant.
For the analysis, four years of financial disclosures (2015-2018) from 103 large health systems that own 44 percent of U.S. hospitals were examined.
Six takeaways:
1. Average health system operating margins increased to 2.92 in 2018, up 13 percent from 2.58 the year prior.
2. The rise in average health system operating margins in 2018 came after average operating margins declined 38 percent from 2015 to 2017.
3. The analysis found 64 percent of health systems saw improved operating margins in 2018, up from 35 percent from 2015 to 2017.
4. The New England and South Central regions saw the most significant improvements in operating margins in 2018 compared to 2017.
5. Half of the health systems studied reported operating margins in 2018 that are below their 2015 operating margin levels by an average of 30 percent.
6. Navigant attributed the rise in average health system operating margins last year to "vigilance in expense control, combined with a notable revenue turnaround."
Read more about the analysis here.
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