Revenues increase at for-profit hospitals

NEWS IN BRIEF — Posted Oct. 8, 2012

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Directly employing more physicians and controlling costs have helped for-profit hospitals counter some of the impact of the economic downturn, says a report issued Sept. 18 by Fitch Ratings.

Patient volumes decreased 2.7% in the second quarter of 2012 compared with the first quarter. But net revenues increased 3.7% from the first quarter.

“Employing more physicians is relatively more expensive, but it contributes to better market share,” said Megan Neuburger, lead report author and a senior director at Fitch, a large credit rating bureau. “Hospitals can capture more volume. There has also been good cost control on the part of management teams.”

Analysts expect patient volume at hospitals to continue to be soft because unemployment remains high. The U.S. Bureau of Labor Statistics reported an unemployment rate of 8.1% in August. Medicare and Medicaid payment rates also are expected to decline, which could further negatively impact revenues.

Note: This item originally appeared at

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