CAHs and Financial Benchmark Performance (Policy Brief #11)

Publication Date: Nov 2009
Author(s): Pink GH, Holmes GM, Slifkin RT
Research Center(s): North Carolina
Project: Analyzing Financial and Operational Performance of CAHs
Topic(s): Finance
Notes: Policy Brief #11

This policy brief presents the results of application of financial benchmarks to recent CAH data.

Key Findings:

  • Very few CAHs (17 of 421) performed better than benchmark on all five indicators in both 2004 and 2006.
  • CAHs with net patient revenue less than $5 million were substantially less likely than larger facilities to be able to consistently perform better than the cash flow benchmark.
  • It is very difficult for CAHs to concurrently generate high margins, bank a lot of cash, have little debt in the capital structure, and achieve low costs relative to charges.