Boost in hospital financial picture

Charging more and admitting more people are keys to hospital profitability, experts say.

By Cheryl Jackson, amednews staff. May 6, 2002.

Having increased their fees and admissions, hospitals continue to look more financially stable, analysts say.

Some of those increases are attributable to more relaxed rules at managed care companies that allow doctors to make more referrals, they add.

Downgrades outpaced upgrades for health care facilities during the first three months of this year, according to a Fitch Ratings report. That's a continuation of last year's trend.

But the gap between the numbers of downgrades and the numbers of upgrades is expected to be smaller this year, said M. Craig Kornett, senior director of Fitch's health care group.

Last year, there were 17 downgrades and two upgrades. In 2000, there were no upgrades.

"The key is when it comes to what the hospitals received from providing that service. There's been sufficient rate increases to offset some of the lower Medicare payments," he said.

"But they haven't shown themselves in the financial operating results yet. It's going to take some time for the financial statements to catch up," Kornett said.

Industry giant Tenet Healthcare reported a 15% increase in revenue for the fiscal third quarter ending Feb. 28, to $3.48 billion from $3.04 billion the year prior. Admissions were up 7.4%.

Kornett said the industry was seeing fewer referral restrictions, which means more patients at facilities. [...]

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