Dec 6, 2022 - Health

Biggest for-profit hospital chains' operating margins surpass pre-COVID levels

Adriel Bettelheim

A hospital sign with the 'H' replaced with a dollar sign — Illustration: Lazaro Gamio/Axios

The nation's three biggest for-profit hospital chains each had positive operating margins that exceeded pre-COVID levels for most of the pandemic, including as recently as the third quarter this year, according to a Kaiser Family Foundation analysis of SEC filings.

Why it matters: Hospital operators are asking Congress to stop scheduled Medicare payment cuts and provide more federal relief, saying they're facing tough economic times.

But the results for HCA Healthcare, Tenet Healthcare and Community Health Systems paint a more optimistic picture for those companies. The three accounted for about 8% of U.S. community hospital beds in 2020.

What they found: Profits from patient care and other operations plus pandemic relief funds left the three chains with operating margins ahead of pre-COVID levels for 9 out of 11 quarters during the health crisis, per KFF.

HCA's revenue exceeded operating expenses by at least 10% for most of the pandemic.
Tenet has had operating margins of at least 5% for most of that time.
Community Health Systems' operating margins have been lower but remained in the black for all but two quarters.

Yes, but: Some hospitals continue to struggle in the current environment, buffeted by inflation and the burdens from COVID-19, the flu and RSV.

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Biggest for-profit hospital chains' operating margins surpass pre-COVID levels

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