Hospitals across Los Angeles County saw an average 2 percent drop in net patient revenue last year while the average amount the institutions charged patients for health care services increased 1 percent, according to a Business Journal analysis.
There are 77 acute care hospitals on each of two Business Journal lists this week – one ranked by net patient revenue last year, and the other by number of staffed beds.
A total of 30 reported increases in net patient revenue – what hospitals actually collect for healthcare services rendered – while 34 posted declines and the rest were either new to the list or unchanged, based on Business Journal estimates.
53 of the listed hospitals reported a boost in gross patient revenue, the term for what providers charge for health care services – although not necessarily what they collect.
The average operating margin for the 77 hospitals on the list was 2.1 percent for 2017.
“These sound like impressive numbers, but the margins are incredibly small – just based on the sheer cost of running a hospital, especially a teaching hospital,” said Jennifer Bayer, vice president of external affairs for the Hospital Association of Southern California, which has 94 member hospitals. “These are very expensive hospitals to run.”
None of the facilities compare with Cedars-Sinai Medical Center, which ranked No. 1 on both Business Journal hospital lists.
The Beverly Grove hospital has 885 staffed beds – 250 more than the No. 2-ranked L.A. County-USC Medical Center in Boyle Heights, and 437 more beds than third-ranked Ronald Reagan UCLA Medical Center in Westwood.
Cedars-Sinai took in $2.9 billion in net patient revenue, down from $3 billion in 2016, while posting $16.2 billion in gross patient revenue, up from $14.8 billion the prior year. Its operating margin was 10 percent last year, down from10.9 percent in 2016.
The gains in revenue for Cedars-Sinai came in part on an increase in affiliations and ties to health care providers across the region. That has meant absorbing some primary care doctors and medical groups into its Cedars-Sinai Medical Network.
Those efforts included buying Marina Del Rey Hospital, joining forces with Torrance Memorial Medical Center, and linking up with UCLA and Select Medical to open the California Rehabilitation Institute.
Meanwhile, Cedars-Sinai maintains an extensive portfolio of medical research, ranging from cancer and neurosciences to women’s health, transplantation, stem cell science and other fields.
“Our drive to serve the greater community also is reflected in our ongoing community benefit programs that seek to improve the health of neighborhoods across the Los Angeles region,” Cedars-Sinai said in a statement.
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