Most nonprofit hospitals and hospital systems had enough cash on hand in 2022 to cover operating expenses for an extended period of time, though about one-in-10 had relatively low levels to cover their expenses, which potentially could leave them vulnerable in a financial crisis, a new KFF analysis finds.
The analysis comes as the hospital industry pushes for increases in Medicare and Medicaid reimbursement levels and Congress considers legislation that would reduce hospital revenues, such as through site-neutral payment reform. It looks at “days cash on hand” at 274 nonprofit hospitals and health systems rated by S&P Global, which are estimated to collectively account for more than half of all nonprofit hospitals and about two thirds of nonprofit beds. The measure is one of several that S&P Global uses to assess hospitals’ financial health and determine their credit rating. Those with more days of cash on hand are better able to weather financial challenges, such as low operating margins.
The analysis finds:
TheMost Nonprofit Hospitals and Health Systems Analyzed Had “Adequate” or “Strong” Days of Cash on Hand in 2022, Though About One in Ten Did Not is available as part of KFF’s expanding work examining the business practices of hospitals and other providers, and their impact on costs and affordability.