Fitch: For-Profit Hospitals' EBITDA Benefited From EHR Incentives

Every for-profit hospital company in the Fitch-rated group received a cash incentive payment from CMS' Electronic Health Record Program in 2011, and all except one company saw a consequential boost to their EBITDA as a result, according to a report from Fitch Ratings (pdf).


The six hospital operators in the Fitch-rated group are Franklin, Tenn.-based Community Health Systems, Nashville, Tenn.-based Hospital Corporation of America, Naples, Fla.-based Health Management Associates, Brentwood, Tenn.-based LifePoint Hospitals, Dallas-based Tenet Healthcare and King of Prussia, Pa.-based Universal Health Services.

Hospital Operator	2011 Cash EHR Incentive Payments Received	EBITDA and % Growth	EBITDA Excluding EHR Payments and % Growth
CHS	$29 million	$1.83 billion; 3.9 percent	$1.77 billion; 0.3 percent
HCA	$306 million	$6.08 billion; 3.1 percent	$5.87 billion; (0.5 percent)
Health Management	$38.3 million	$851 million; 12 percent	$811 million; 6.7 percent
LifePoint Hospitals	$15 million	$560 million; 7.7 percent	$534 million; 2.6 percent
Tenet	$42 million	$1.17 billion; 9 percent	$1.11 billion; 3.9 percent
UHS	$11 million	$1.21 billion; 51.3 percent	$1.21 billion; 51.3 percent

HCA received the highest amount in Medicare and Medicaid EHR incentive payments with $306 million. If EHR income is excluded from EBITDA, HCA and CHS would have experienced flat or negative growth in 2011, while Tenet, LifePoint Hospitals and Health Management all would have seen significant cuts in their growth. UHS was the only hospital operator in which the EBITDA was not affected by the EHR incentive payments, according to the report.

Fitch analysts concluded the amount of Medicare EHR incentive payments will ramp up in 2012 as more hospitals attest to meaningful use. Additionally, more for-profit hospital companies will record some type of deferred revenue, as HCA and UHS did in 2011, and the highest amount of EHR incentive payments for most for-profit hospital operators will most likely come in 2013 and 2014.

More Articles on EHR Incentive Payments:

39 Things to Know About CMS' Stage 2 Requirements for Meaningful Use

Hospitals Receive $1.8B in EHR Incentive Payments in CY 2011

New CMS Website Shows Registration, Payment Data for EHR Incentive Programs