Hospital Revenue Growth Slows to Its Lowest Recorded Level

Historical revenue growth for not-for-profit hospitals has tended to hover around 7 percent annually, but in the last year, it dropped to 3.9 percent, the lowest level on record, according to a new report by Moody’s Investors Service.


Both a drop in hospital admissions (a first) and growth in expenses contributed to the decline. Expense growth exceeded revenue growth for the second year in a row.


Moody’s listed specific contributors to the income slowdown:

  • Increased use of high-deductible health plans, causing patients to postpone care or use lower-cost retail clinics
  • Deeper reimbursement cuts required by the 2012 Budget Control Act and the Affordable Care Act (ACA)
  • Medicare’s two-midnight rule