Greedy Trial Lawyer
Hospital Industry Making Big Bucks
Category: Ho Hum
Shed no more tears over the health of the hospital industry. Its profit margin is at a 6 year high and it is building new facilities at the highest rate in 50 years. Might we expect a reduction in hospital charges or improvement in patient safety? Probably not. The industry is putting its money in the stock market.
The story of riches in those wards and operating suites comes from USA Today:
The nation's hospitals, boosted by a slowdown in expense growth and continued ability to drive a hard bargain with insurers, posted profit margins that reached a six-year high in 2004 - and indications are that 2005 was just as good. The hospital industry is in the midst of its biggest construction boom in 50 years, spending nearly $100 billion in inflation-adjusted dollars in the past five years for new and expanded facilities nationwide, often in rapidly growing suburban areas.That spending comes as conditions have been good for both borrowing and spending. Hospitals reported an average 5.2% profit margin in 2004, the last full year of data available from the American Hospital Association.
In addition to strong bargaining power and slowing expenses, profits were also driven by investment income from an improving stock market, says the association's Rick Wade.
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