Differences in characteristics of hospitals with sustained high and sustained low profitability

The organizational and operational characteristics of 140 private Florida hospitals with sustained high profitability and sustained low profitability were compared using pretax operating margin (PTOM) and pretax return on assets (PROA) measures. Approximately 15 to 20 percent of hospitals were defined as PTOM or PROA high-profit or low-profit for the years 1990, 1991, and 1992. The PTOM or PROA high-profit groups had a lower adjusted average length of stay and debt utilization, and a higher labor yield, occupancy rate, and percent with high hospital accreditation ratings (p < .05). In addition, the PROA high-profit group had a higher case-mix index and Medicare mix (p < .05). Characteristics that were different for high-profit and low-profit groups were within the scope of management.