National Trends of Hospital Revenue, Profit, and Labor Costs: 2011-2022
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Associated Project
Online Dashboard Helps States and Employers Understand Hospital Costs
Prepared for:
National Academy of State Health Policy
Key Findings
- The national median Operating Profit Margin declined by 2 percentage points from 13 percent in 2021 to 11 percent in 2022. The national median Net Profit Margin, on the other hand, dropped significantly from 12 percent in 2021 to 2 percent in 2022. The drop is likely attributable to the reduction in COVID-19 funding, the stock market decline, and an increase in operating expenses in 2022.
- As the national total Hospital Expenses (Inclusive of All Services) rose over time, the proportion of Direct Patient Care Labor Cost remained relatively consistent at 29 percent in 2022, compared with 27 to 29 percent in prior years.
- The national median Direct Patient Care Labor Cost per Adjusted Discharge rose by 31 percent from 2019 to 2022, driven by a faster pace of growth in median Direct Patient Care Labor Cost than in median Adjusted Patient Discharges.
- The national median Direct Patient Care Labor Cost for both Hospital Employed Labor and Contracted Labor continued to rise in 2022, but the rate of growth was faster for Contracted Labor than for Hospital Employed Labor.
Mathematica and NASHP prepared a Labor Cost Data Brief using the NASHP Hospital Cost Tool (HCT). The brief examines the national trends of hospital revenue, profit, and labor cost from 2011 to 2022, which highlight the impact of federal and state COVID-19 relief funds and more. State officials interested in specific hospital direct care labor cost trends and profit margins can check out the visual dashboards within the HCT and even use the downloadable data set.
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