Q3 wrap-up highlights deterioration for hospitals

Healthcare Purchasing News, Dec, 2005

With most of Goldman Sachs' covered hospital companies having released 3Q'05 results, GS makes the following- observations on the group. After initial signs of improvement in early 2005, the third quarter showed a deterioration in bad debt trends for the second straight quarter. The uptick in uninsured admissions also drove up total uncompensated care expense.

The third quarter highlighted a difficult admissions environment for the public hospital operators. Healthy reimbursement rate increases were one of the few positive highlights for the hospital industry. Revenue per adjusted admission growth rates ranged from 1.4% to 7.6%. The average price increase for the group was 4.1% with commercial payer increases in the 6%-7% range. Hurricanes had significant impact on performance and effects are likely to linger into Q4.