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The Health of the Hospital Industry and Issues in Congress

The Health of the Hospital Industry and Issues in Congress


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A final report card on the health of the hospital business was compiled at the end of 2006 by the American Hospital Association.1 The report card shows several trends: hospitals posted record profits in 2005, at $28.9 billion, nearly 10% more than in 2004. The growth in overall profits was also reflected in a continued a trend upward in profit margins, a trend that began in 2002. Margins in 2005 reached 5.3%, well below the 6%-plus margins achieved in the mid 1990s but still healthier than those seen in 2000 and 2001. Even as profits grew, the amount of uncompensated care provided at hospitals also grew by 7% in 2005, reaching $28.8 billion. Financially, hospital performance was strong, and the outlook is for continued stability, especially if the U.S. economy continues to maintain its slow growth.