QSS: Revenue Growth Strong in Health Services, Hospital Profitability Recovered

Census2This morning’s Quarterly Services Survey (QSS) from the Census Bureau showed 2015 was a good year for revenue growth in health services. Overall, fourth quarter revenue grew 1.8 percent on the quarter, 3.7 percent from Q4 2014, and 5.5 percent year on year (Table I).

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Revenue growth in psychiatric and substance abuse hospitals really blew the doors off in Q4, increasing 8.2 percent. However, this looks idiosyncratic. Q4 2014 to Q4 2015 growth was only 1.6 percent, and year on year growth was 4.0 percent.

Outpatient care centers and home health services were strong in Q4, growing revenue by at least three percent. Annual growth was also strong.

With respect to profit margins, it looks like the collapse in profitability for tax-exempt hospitals in the previous QSS was idiosyncratic – or even a data glitch. Net revenue per inpatient day and per discharge both grew by almost six percent; and taxable hospitals performed marginally better than that (Table II).

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For tax-exempt hospitals, net revenue per patient day increased 3.2 percent year on year; while net revenue per discharge increased 4.0 percent. The increase in both measurements was over 10 percent for taxable hospitals.

It looks like health services providers are doing quite well under Obamacare.

Comments (2)

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  1. Ron Greiner says:

    Mental health parity was finally installed with Obamacare. The days of $2,500 maximum per year for mental health services as a covered expense with your health insurance are gone and now we have unlimited lifetime maximums for mental health. So now when your 16-year-old daughter is dumped by her boyfriend her depression is possibly worth mega bucks. After all, there are no tests to prove she is not depressed so how can any claim be questioned?

    Maybe we should have raised the maximum yearly covered expense for depression from $2,500 to $100,000 to slow the rise of future health insurance rate increases. Then when your daughter hit $100,000 in mental health claims her Dr. Quack would proclaim, “Good news, shes cured!”

    Anybody who says Obamacare didn’t create a windfall for mental health gurus is peddling fiction.

  2. Jolly says:

    The Affordable Care Act (because Obamacare sounds so nasty a la Reaganomics or something) didn’t create the windfall. I’d argue we take a look at how rates are set for some of these services and what’s required to handle some of society’s most complex social management quandary.

    The possible cost of a bout with mental depression should be weighed against the very real cost of say hours of studying/school hours lost, potential harm and danger to society and/or herself, etc. I personally want my tax dollars to go to unlimited mental health therapy for everyone if it may help lower our serial killer population. Keeping folks stable and productive is an important public health issue. It’s as important as say making sure every 6 year old has a chance to learn to read outside of home, you know, just the basics. Mental health these days and the resurgence of heroin in white communities makes that provision of the Affordable Care Act very necessary, very basic :)