We’ve looked at the highest Quality hospitals among the New York Big Apples. But we’ve not looked directly at whether any of them make any money. We’ll use Operating Profit Margin as an important measure of profitability. This is a pretty pure number and gets to whether their operations are financially healthy or not.
Let’s start with the 5 highest Quality hospitals. What you can see is there’s no shine on that apple. Only Mount Sinai St. Luke’s has been above water since 2011. Somehow, their high quality does not translate to being able to turn a profit. Not good.
Even those that score highest in efficiency are unable to make money with the exception of Kings County in FY 2019 after a remarkable turnaround.
We should give a nod to New York Presbyterian though as being pretty good among a not so effective group.
So what’s happening? We’ll turn to our AI assisted model and ask which of 40+ important operating metrics* are keys to Operating Profit among the NY Bigs. It sorts out which metrics make the most difference and tosses out those that are either redundant or not important.
The big influencers are below: The top two dominate.
- Higher Net Patient Revenue per Total FTE’s
- Low Expense per Adjusted Discharge
- High HCAHPS Overall Score
- Less Outpatient Revenue
- Higher PP&E per bed
- And better Patient Safety Composite scores
*Selected items from: Income Statement, Plant and Equip accts, Occupancy, CMI, Payor mix in CCU, ICU, and Gen Med Surg units, Productivity, and Quality Performance.
Our big take-away is that many of the New York Big Apples do not do well with basic blocking and tackling. Other cities have high quality facilities getting differentially higher revenues. And let’s not forget the FTE count among overhead departments that often drives costs.
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So, is quality really good business? Not if you can’t manage to turn a margin.
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