Hospitals losing Money. What will be the impact on Home Health Care?

Stephen Tweed | March 10, 2009 | Newsroom
According to a report from Thomson Reuters, U.S. hospitals maintained their operating margins through the third quarter of 2008. But steep investment losses pushed 50 percent of them into the red for 2008, resulting in a “near-zero” median margin for the industry. The bottom quartile of hospitals posted average losses of 7 percent or more…

According to a report from Thomson Reuters, U.S. hospitals maintained their operating margins through the third quarter of 2008. But steep investment losses pushed 50 percent of them into the red for 2008, resulting in a “near-zero” median margin for the industry. The bottom quartile of hospitals posted average losses of 7 percent or more for the year.

Meanwhile, the recession-fueled increase in the numbers of uninsured and Medicaid patients is making hospitals’ financial position worse this year. The rout has been compounded by a drop in the number of surgeries, which have affected 44 percent of the hospitals in the survey.

What are you seeing with hospitals in your marketplace? How will this impact home health care?

One trend we observe is that when hospital census is down, home health referrals drop off as well. Are you seeing a decline in your hospital referrals?

Another trend we have seen in the past is that when financial performance lags, hospital executives decide to exit the home health business. With many hospital based home health agencies losing money anyway, look for some executives to cut their losses and get out of the business. If so, this will be a great time to pick up some market share. It will also be a time for strategic buyers to move into your marketplace, acquire the hospital based agency, and become your new competitor.

What are you seeing? Give us your comments below.

Stephen Tweed
Stephen Tweed is among the top Thought Leaders in Home Care today. As an industry researcher, author, and executive coach, he has worked with owners and CEOs of companies in the top 5% of Home Care and is a frequent speaker at Home Care association conferences and corporate meetings across the US and Canada.

Related Posts

Shared Vision Can Change Your Life

August 21, 2025
This past week, I was in Fort Myers, FL leading an Executive Strategy Retreat for a wonderful family-owned Home Care company. We spent a full day using the storyboarding technique from the Walt Disney organization to stimulate creativity, make ideas visible, and craft a five-year vision for the company. We then dug into detail as we defined…

Corporate Culture in Home Care

August 7, 2025
I've been thinking a lot about Corporate Culture in Home Care For the past few weeks, I've been deeply immersed in the final preparation for the start of school. As you may have heard, I recently accepted a position as Adjunct Instructor of Corporate Culture in the Master of Arts in Communication and Business Leadership at High Point…

Appreciation and Recognition

July 31, 2025
This past Tuesday evening I was in Scottsdale, AZ for the annual CPAE Speaker Hall of Fame Awards, and the Cavett Award, presented by the National Speakers Association. This is the final formal banquet that brings to a grand finale the annual convention of NSA. The National Speakers Association is a society of experts who speak professionally. These are some of…