Healthcare Operating Margins Are Improving, But Still Lower than 2015

After 2015, the healthcare systems have faced a great decline, things are gradually improving but still, there is a long way to go. 

According to a recent analysis, from 2015 to 2017, the health care system has faced more than a 38% reduction, which was later improved by an average of 13% in 2018.

More than 100 health systems, which owns 45% of the nation’s hospitals were examined under this report and they showed a certain stabilization after the great decline but still, they are not enough from what we had in 2015.

2018 is considered a turnaround year for the healthcare system, acquiring profitable margins, control over expenses and improving revenues. 

The findings of the analysis stated that about fifteen of the healthcare systems had a steady growth in their revenues by 15% while the other ten has an excessive growth of 20%. 

The researchers have also mentioned that there is one particular health system that doubled its returns by procuring one of the large nursing chains. 

Regardless of that, the other mergers and acquirers between several health care systems did not show any sort of growth in their revenues, while the smaller health care organizations have performed well compared to their competitors in the fiscal year 2018.

The total patient revenue, however, showed a decrease, especially in larger groups, the smaller health care systems have experienced a profitable change. 

Despite the fact, that the activity of merging and acquiring is now least considerable option systems think that may help them play a great role in controlling expenses and revenues.

These larger health systems need improvement, higher revenue cycle and electronic medical records (EHR) optimization also come useful in making the financial condition of these health systems from 2017 to 2018 much better.

Moving onto the factors that are leading the margin towards the decline of healthcare systems from 2015 to 2017, according to researchers. These factors are based upon the increase in the number of funded patients and an increase in dues and collection rates from high financial aid patients. 

Some measures must be taken to increase revenues and improve financial performance; the researchers have stated certain advice to:

• Cost control- expenses that include supply, bonded services, and labor
• Analyze the return rate of investment on doctors and physicians.
• Conduct fine surveillance on revenues and returns 

The analysis conducted by Alex Hunter emphasized and reinforced certain beliefs that in order to improve the operating margins of healthcare systems certain things have to be implied.   

For example, staff control, and improving the effectiveness of clinics, and the usage of better resources that are essential to improve the financial condition of these healthcare systems. 

However, there is still a long way to go to overcome the effect of inflation on health care systems since 2015. 

Learn how our AllPayor® Software is saving other organizations $$MILLIONS!

If you are interested in a free demo of our AllPayor® Software, please go HERE or you can register for a FREE webinar HERE