A new financial analysis of 104 health systems comprising 47% of U.S. hospitals finds broad-based deterioration of operating margins post-ACA insurance coverage expansion.

Results of Health Systems Financial Analysis

According to the Guidehouse study of for- and not-for-profit health system financial disclosures, from 2015 to 2017:

• Average operating margin decline for analyzed systems was 38.7%. Not-for-profit system margins fell 34%, for-profit margins fell 39%. 
• 65% of systems experienced operating income declines totaling $6.8 billion, with the most significant reductions in the U.S.’ fastest-growing regions: West/Southwest and South Central.
• 22% of systems experienced negative operating income. 

At the root of these declines were multiyear reductions in the rate of topline operating revenue growth, which fell from 7% (2015 to 2016) to only 5.5% (2016 to 2017), and a failure to contain expenses in line with deterioration.