North Texas hospitals profitable but inpatient business slows

Posted Tuesday, Oct. 08, 2013  comments  Print Reprints
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North Texas hospitals saw a decline in the number of days patients spent in their facilities from 2009 to 2011, despite adding more beds, a new study says.

That trend has reversed at the area’s three largest not-for-profit hospital groups, based on their public filings. But Allan Baumgarten, who conducted the study of Texas hospitals and health plans, said he expects area hospitals to see only a small increase in inpatients resulting from the Affordable Care Act, which aims to increase the number of insured Americans.

The recession was one reason for the decline in hospital use, as was the growing level of deductibles and co-payments in healthcare insurance, said Baumgarten, an independent healthcare analyst in Minnesota. He has conducted reports on healthcare in 12 states and said the trends at the North Texas hospitals hold true in other markets as well.

According to data from the Texas Department of State Health Services’ annual survey of hospitals, hospitals in the Dallas/Fort Worth area added more than 500 inpatient beds from 2008 to 2011, Baumgarten said. Over the same period, those hospitals’ inpatient days declined 3 percent, he said.

The percentage of hospital beds occupied also fell in that period, from 65.9 percent in 2008 to 62 percent in 2011. A similar trend was seen at Houston-area hospitals, Baumgarten said.

According to recent reports by not-for-profit hospital systems in North Texas, however, patient days have begun increasing again.

Most recently, Arlington-based Texas Health Resources said its patient days were up nearly 2 percent as of June 30 from a year ago. Baylor Health Care System was up 3.8 percent and Methodist Hospitals of Dallas was up 2.2 percent in the same period.

Even as more Texans have access to comprehensive or subsidized health insurance, however, Baumgarten said he expects only “a small bump” in those numbers under the healthcare law, also called Obamacare. The most affordable insurance policies sold on the insurance exchanges created by the law carry steep deductibles, he noted, and that “will still be a barrier” for patients, especially for elective procedures.

His study also showed that area hospitals remained solidly profitable during that period.

According to the study, 68 North Texas hospitals stretching from Hillsboro to Sherman reported total net income of $1.58 billion in 2011. That amounted to 10.3 percent of their net patient revenue, which is money the hospitals realized after accounting for negotiated discounts, bad debt and charity care.

Net income was down 21 percent from 2010, when the same hospitals reported net income of $2 billion, or 12.9 percent of revenue.

Jim Fuquay, 817-390-7552 Twitter: @jimfuquay

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