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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

By the numbers: Census to show first decline of white population

Expand chart
Data: U.S. Census Bureau via Brookings Institute; Chart: Sara Wise/Axios

The latest census is expected to show the first decline in history for the nation's non-Hispanic white population, according to an analysis of U.S. Census Bureau data by the Brookings Institution's William Frey.

Why it matters: The U.S. is rapidly moving toward a majority-minority population — with the racial and ethnic diversity most apparent in younger cohorts. "This really is moving in a direction that’s going to favor the issues and the political agendas of these younger people," Frey told Axios.

14 mins ago - Politics & Policy

Democrats plot filibuster workarounds

Illustration: Aïda Amer/Axios

Several Democratic lawmakers are moving away from calls to eliminate the filibuster while privately discussing alternatives to bypass it, Axios has learned.

Why it matters: These talks have ramped up in earnest following the Republicans’ move Tuesday to block a measure to protect and expand voting rights.

15 mins ago - Politics & Policy

Infrastructure's remaining potholes

Illustration: Shoshana Gordon/Axios

President Biden declared victory in announcing the bipartisan infrastructure package. Now comes the hard part: negotiating with his own party on the separate reconciliation bill.

Why it matters: By trying to simultaneously pass two massive spending bills, Biden and congressional leaders are attempting a legislative feat that will likely require Congress to work through its August recess — and potentially well into the fall, according to lawmakers and senior staffers.