The Financial Position of Private Community Hospitals, 1961–71

TIC.8 article deecribes the trend8 C the finanoial position of nongovernmental oammunity hospitals im the period 1961-n and Cdentifies where po8eZble the important causes of lzet income variation during the period, both overall and between hoepitala of d4fferent size and ownership. Variatdons Cn net income by bed size of hospital were alao studied for 1971 in a% attempt to ehed ad&tional light on factor8 infIuenczng financial po8ition. A8 a result of several factors, Inclut2ing greater third-party coverage and lncreaees in the range and complexity of services, the net &come of hoapital improved substantially in 1961-n. Net bcome as a rate of return on plant aaeets in nonprofit hospitals rose from I.4 percent to 3.0 percent in the decade; the rate of return in for-profit hoepitals increased from 8.9 percent to 16.2 percent. The 1971 data show that net income dfferentiala result from the simultqneous Heraction of many factora-from relative prices to the relative e#kzency of hospdtal operation. Among the faotora identified, the range and comple&y of services, geographical location, and ownership aecm.ed meet important in the determknatiotz. of @an&al position.