Direct Answer
7 SEC filers are classified under the Standard Industrial Classification codes that describe the hospitals industry, and their latest annual reports show $142.3 billion of combined revenue and a median operating margin of 11.8%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Hospital operators run acute care hospitals and associated outpatient sites and are paid by insurers and government programs. Admissions, payer mix and labor cost drive profit, and commercial insurance subsidizes lower government rates. The first numbers to compare across companies here are admissions and adjusted admissions, revenue per adjusted admission and payer mix.
Key Industry Metrics
- Admissions and adjusted admissions: Inpatient admissions and a measure that also counts outpatient activity. Adjusted admissions give a fuller volume picture than inpatient stays alone.
- Revenue per adjusted admission: Average revenue per adjusted unit of activity. It reflects payer rates, acuity and service mix, so compare it with cost per admission.
- Payer mix: Split of patients among commercial insurers, Medicare, Medicaid and uninsured. Commercial plans pay most, so mix changes affect profit.
- Labor cost as a share of revenue: Wages, benefits and contract labor relative to revenue. It is the largest expense, so a rising ratio signals wage pressure or reliance on agency staff.
- EBITDA margin: Earnings before interest, taxes, depreciation and amortization as a share of revenue. It compares operating profit across hospitals before financing and capital costs.
Primary Macro Drivers
- Volume and aging population: Older patients use more inpatient and outpatient services, so population growth supports admissions and adjusted admissions.
- Commercial contract rates: Rates negotiated with commercial insurers are above government rates, so renegotiations move revenue per adjusted admission and margin.
- Medicare and Medicaid rate updates: Annual rate updates set payment for large patient groups, so an update above or below cost inflation changes margin.
- Labor costs: Pay for nurses and staff is the largest cost, so wage rises lift labor cost as a share of revenue unless prices rise.
Major Risks
- Reimbursement cuts: Lower government or insurer payments cut revenue per admission while costs are fixed in the short run; watch final payment rules and EBITDA margin.
- Labor shortages and wage inflation: Short staffing leads to premium pay, agency use and closed beds; watch labor cost share of revenue and admissions.
- Uninsured volume changes: Changes in insurance coverage shift patients between paying and uninsured, which affects bad debt and payer mix; watch uninsured volume and bad debt expense.
- Regulatory scrutiny: Billing reviews and investigations can lead to repayments and fines; watch legal proceedings and reserves.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Defensive |
| Capital Intensity | High |
| Regulatory Intensity | High |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Hospitals Filers in the SEC Record
7 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 8060, 8062. Their latest fiscal years end in 2025, and together they reported $142.3 billion of revenue. Median revenue growth over the prior year was 6.2%. Median operating margin was 11.8% and median net margin 8.6%. Median total liabilities were 69% of total assets, and 6 of 7 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Hca Healthcare, Inc. | $75.6 billion | 7.1% | n/a | 9.0% | FY 2025 |
| Tenet Healthcare Corp | $21.3 billion | 3.1% | 16.5% | 11.1% | FY 2025 |
| Universal Health Services Inc | $17.4 billion | 9.7% | 11.5% | 8.6% | FY 2025 |
| Community Health Systems Inc | $12.5 billion | -1.2% | 11.9% | 4.1% | FY 2025 |
| Ardent Health, Inc. | $6.3 billion | 6.0% | n/a | 2.1% | FY 2025 |
| Encompass Health Corp | $5.9 billion | 10.5% | n/a | 9.5% | FY 2025 |
| Surgery Partners, Inc. | $3.3 billion | 6.2% | 11.8% | -2.4% | FY 2025 |
Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Hospitals guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Hospitals industry?
Key performance indicators for the Hospitals industry include: Admissions and adjusted admissions, Revenue per adjusted admission, Payer mix, Labor cost as a share of revenue, EBITDA margin. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Hospitals industry?
The Hospitals industry is generally defensive, meaning demand tends to remain relatively stable regardless of the economic cycle. Companies in this space can provide portfolio stability during recessions, though growth may lag in strong expansions.
What are the biggest risks in the Hospitals industry?
The primary risks for Hospitals companies include: Reimbursement cuts, Labor shortages and wage inflation, Uninsured volume changes, Regulatory scrutiny. Investors should assess each company's exposure to these factors and its track record of navigating them.