Quarterly Services Survey: Strong, Inconsistent Growth in Health Services Revenue

This morning’s Quarterly Services Survey from the Census Department showed good growth in revenues for health services, but it was inconsistent within the industry. Overall, first quarter revenue grew 0.7 percent from the fourth quarter and 5.2 percent from the first quarter of 2015 (Table I).

While hospital revenues grew very strongly, at 3.0 percent on the quarter, there was significant decline of 2.4 percent in physicians’ revenue. Other than outpatient care centers, other ambulatory settings also experienced revenue decline from the fourth quarter.

Nevertheless, they all showed strong growth from the first quarter of 2015. Overall, health services revenues grew 5.2 percent. The worst performer was psychiatric and substance abuse hospitals, which still grew revenues by 3.2 percent.

It looks like health services establishments continue to outperform the rest of the economy, corroborating other economic data discussed at this blog.

There was also a big boom in tax-exempt hospitals’ profits in the first quarter (Table II). However, this has been volatile since we started tracking it. Over all, both tax-exempt and taxable hospitals’ net revenues per patient day and per discharge have been stable since the first quarter of 2015.