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Banner Health's academic medical center in Phoenix. Photo: Banner Health

The number of hospital admissions, surgeries and other medical procedures has continued to stay flat in many parts of the country, but that hasn't prevented hospitals from retaining large sums of money and hiring more people.

The big picture: America's rural hospitals are dying. But large not-for-profit hospital systems in cities and suburbs are doing extremely well as premiums rise and as patients struggle to afford their medical bills.

Details: Axios analyzed the financial statements of 31 prominent not-for-profit hospital systems for the first 3 months of 2019.

  • This sample collectively generated $68.5 billion of revenue in the first quarter of this year. That's $274 billion annualized, or more than one-fifth of all hospital spending.
  • The combined operating margin was 5.1%, compared with 4.5% in the first quarter of 2018.
  • The combined net margin (after factoring in investment income) was 16.4%, a large jump from 5.5% in 2018.
  • These margins are on par with some pharmaceutical and medical device companies, and well above the margins for insurers and drug distributors.

Between the lines: Hospitals are feasting on bigger investment returns, boosted by the stock market's run, but they also are profiting more from commercial and public health insurer payments.

The intrigue: Not-for-profit hospitals don't pay taxes and don't have "shareholders" like publicly traded companies, so they are required to reinvest any surplus cash into their communities.

Case in point: Newly opened patient towers at Banner Health's academic medical center campuses in Arizona cost $1 billion and "are expected to drive additional volume increases," Banner said in a memo last week to bondholders. Banner declined an interview request.

  • "It's clear the hospital industry today continues to be driven by volume, which is where the big returns are," said Paul Ginsburg, director of the USC-Brookings Schaeffer Initiative for Health Policy. "Value-based [payment] approaches conflict with that."

Go deeper: Hospitals are making a fortune on Wall Street

Go deeper

House passes $768 billion defense spending bill

Photo: Andrew Harrer/Bloomberg via Getty Images

The House approved a $768 billion National Defense Authorization Act (NDAA) for the 2022 fiscal year in a bipartisan 316-113 vote on Thursday.

Why it matters: The annual bill, which authorizes Pentagon spending levels and guides policy for the department, would require women to register for the military draft, among other provisions.

2 hours ago - Politics & Policy

Republicans’ secret lobbying

Illustration: Shoshana Gordon/Axios

The five Senate Republicans who helped negotiate and draft the $1.2 trillion bipartisan infrastructure bill have been privately courting their Republican colleagues to pass the measure in the House.

Why it matters: House GOP leaders are actively urging their members to oppose the bill. The senators are working to undercut that effort as Monday shapes up as a do-or-die moment for the bipartisan bill.

CBC members nix border visit

A Haitian migrant carries a toddler on his shoulders today as he crosses the Rio Grande River. Photo: Pedro Pardo/AFP via Getty Images

Several members of the Congressional Black Caucus weighed visiting the U.S.-Mexico border this week to investigate the conditions faced by Haitian migrants and protest allegations of inhumane treatment by U.S. agents.

Why it matters: It's a thorny proposition both in terms of timing and messaging. Going assures a new wave of negative headlines for President Biden amid sinking popularity. And with congressional deadlines in the coming days over infrastructure, a possible government shutdown and debt-limit crisis, Democrats can't afford to lose any votes in the House.