Hospital Profitability Remains Strong in Texas

An article published this week by “D Healthcare” presents key statistics on the most profitable hospitals in North Texas. The data is useful to analyze and compare to hospitals in other parts of the country. Data on profit margins, net income, net patient revenues and occupancy percentages provide good benchmarks for comparison purposes.

Despite relatively flat inpatient occupancy rates, the cumulative profit margins for hospitals in North Texas have been above 12% in three of the last four years. One strategy that successful hospitals are using involves increasing their presence in neighborhoods to deliver primary care services, which includes partnering with retail outlets such as Walgreens, CVS and Wal-Mart.

The article notes that 740,000 people in Texas gained health coverage through the Affordable Care Act, however, that increase probably will not increase inpatient rates at hospitals; therefore, hospitals have begun to team up with retailers to expand their reach within communities to deliver primary care.

Those retail activities are in addition to hospital expansion plans that include the construction of new facilities. The article contains a link to a snapshot of the “healthcare building boom” going on in North Texas. The construction activity reflects several trends, including the aging baby boomer population and an increase in the number of people moving to Texas. The two fastest growing metro areas in the country in recent years have been Dallas-Fort Worth-Arlington and Houston-The Woodlands-Sugarland.

To review the data points on revenue, profitability, net income and inpatient percentages, see the article and its accompanying chart at: http://healthcare.dmagazine.com/2015/01/21/here-are-the-most-profitable-hospitals-in-north-texas-and-why/