Thursday, March 9, 2017

QSS: Good Growth in Health Services Revenue

This morning’s Quarterly Services Survey (QSS), published by the Census Bureau, showed good revenue growth across health services, except for specialty hospitals. 

Overall, revenue grew 4.2 percent in the fourth quarter. Further, growth versus Q4 2015 was a strong 6.9 percent and YTD growth is up 5.9 percent. Only specialty (except psychiatric and substance abuse) hospitals showed a decline. Revenue at outpatient care centers has grown 10.5 percent, Q4 2016 versus Q4 2015, a remarkable growth which hopefully reflects a change in location of care to lower cost settings versus hospitals. Although, hospitals’ revenues still grew a healthy 7.5 percent.

See Table I below the fold:


Further, measurements of operating profit at tax-exempt hospitals grew dramatically: Both net revenue per inpatient day and net revenue per discharge rose by over 20 percent. Further, both measurements increased by over 35 percent, Q4 2016 versus Q4 2015, and by over 19 percent year to date. Taxable hospitals’ margins improved a little, but are still negative longer term (Table II).


Health services continue to do very well out of Obamacare, which likely explains their resistance to the American Health Care Act, recently introduced by Republican committee chairman in the U.S. House of Representatives and supported by President Trump.

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