Strong commercial payer reimbursement, high case mix acuity and prestigious reputations coupled with university partnerships give academic medical centers a financial edge in the nonprofit healthcare sector.
Moody's Investors Service released a report this week, showing that AMCs are among the strongest credits within its nonprofit hospital base. The median credit rating for an AMC is "A1" compared with "A3" for all nonprofit hospitals.
Despite the strong borrowing capacity and large revenue base, AMCs face some unique challenges, Moody's analysts said. For example, their cash flow is somewhat weaker, expense growth continues to outpace revenue growth and they must battle to keep federal medical education and research funds.
Here are 20 statistics on AMC finances, based on Moody's median report.
Note: The following data are based on audited FY 2012 financial statements for 85 academic medical centers within Moody's portfolio. An AMC was defined as a major teaching hospital that receives more than $50 million per year in National Institutes of Health funding. Examples of AMCs within Moody's portfolio include Massachusetts General Hospital in Boston (rated "Aa2"), Tampa (Fla.) General Hospital (rated "A3") and Fletcher Allen Health Care in Burlington, Vt. (rated "Baa1").
Academic medical center medians — fiscal year 2012
Admissions: 32,612
Medicare case mix index: 1.86
Total operating revenue: $1.2 billion
Total cash and investments: $629.2 million
Total comprehensive debt: $538.5 million
Operating margin: 2.7 percent
Operating cash flow margin: 9.1 percent
Cash on hand: 150.7 days
Maximum annual debt service coverage: 4.6x
Debt-to-cash flow: 3.2x
Annual operating revenue growth rate: 6.6 percent
Annual operating expense growth rate: 7 percent
Debt-to-capitalization ratio: 37.7 percent
Accounts receivable: 48.9 days
Capital spending ratio: 1.4x
Average age of plant: 9.3 years
Medicare as percentage of gross revenue: 33.5 percent
Medicaid as percentage of gross revenue: 18.5 percent
Commercial payers as percentage of gross revenue: 37.7 percent
Self-pay/uninsured as percentage of gross revenue: 7.5 percent
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