Hospital Industry Anaylsis

Part
01
of seven
Part
01

Industry Analysis: Hospital Industry Associations

Some top industry associations for senior leaders of the United States hospital industry include the American College of Healthcare Executives (ACHE), the American Association of Healthcare Administrative Management (AAHAM), Healthcare Financial Management Association (HFMA), and the American Health Information Management Association (AHIMA).

American College of Healthcare Executives (ACHE)

  • The American College of Healthcare Executives (ACHE) is one of the "most relevant associations" that hospital industry/healthcare managers in the United States are leveraging to stay connected.
  • For more than 85 years, the American College of Healthcare Executives (ACHE) has remained focused on one mission to advance leaders and the field of healthcare management for excellence. The association is the professional home for over 48,000 healthcare executives that are committed to integrity, lifelong learning, leadership as well as diversity and inclusion.
  • ACHE is committed to being the preeminent professional society that leaders can leverage to help them gain useful knowledge that will improve health for patients and communities. ACHE has an established network comprising 77 chapters.
  • Every year more than 4,000 participants gather together and benefit from groundbreaking research as well as thought leadership, policy updates, and actionable innovations promoted by their peers. ACHE's publishing division, known as Health Administration Press (HAP), is one among the largest publishers of books and journals related to health services management.

The American Association of Healthcare Administrative Management (AAHAM)

  • The American Association of Healthcare Administrative Management (AAHAM) is one of the "most relevant associations" that hospital industry/healthcare managers in the United States are leveraging to stay connected.
  • Individuals that are aspiring for "upper-level titles" in the United States hospital industry are associating with AAHAM to indicate their knowledge of industry-leading standards and quality. AAHAM certification improves the salary outlook and positions individuals for lucrative promotions to top positions in healthcare administration. This insight is credited to PayScale.
  • AAHAM boasts of several members who are certified revenue cycle executives within the healthcare industry. Some AAHAM members are chief revenue cycle officers (CRCO) and make over $130,000 annually. Climbing the career ladder to senior leadership positions and bigger "profits is greatly aided" by AAHAM's certification.
  • The American Association of Healthcare Administrative Management (AAHAM) has over 500 members that form a fellowship.

Healthcare Financial Management Association (HFMA)

  • Healthcare Financial Management Association (HFMA) is one of the "most relevant associations" that hospital industry/healthcare managers in the United States are leveraging to stay connected.
  • The Healthcare Financial Management Association (HFMA) community has over 43,000 members that include leaders in healthcare finance and professionals from hospitals as well as health systems.
  • It is the premier membership organization of healthcare leaders that get tasked with financial management roles in the healthcare industry across the United States.

The American Health Information Management Association (AHIMA)

  • The American Health Information Management Association (AHIMA) is one of the "most relevant associations" that hospital industry/healthcare managers in the United States are leveraging to stay connected.
  • Founded since 1928, AHIMA is "the premier association of health information management (HIM)" professionals across the world. The association serves 52 affiliated component state associations and over 103,000 health information professionals.
  • AHIMA is a leading authority for health information management knowledge. It is widely respected for its esteemed credentials as well as rigorous professional education and training.
  • AHIMA is leading advancements in the use of health data and information management to delivery quality healthcare worldwide. Its members stay ahead in health data and information management through the cutting-edge programs as well as professional development opportunities that come with AHIMA membership, such as comprehensive continuing education.

American Association for Physician Leadership

  • The American Association for Physician Leadership has "over 11,000 members" that are enjoying the benefits of membership of an exclusive physician leadership constituency.
  • The American Association for Physician Leadership grants its members some access opportunities to peer-reviewed research as well as other content through an award-winning Physician Leadership Journal, which is shipped directly to them. It also provides online physician leadership news covering articles that focus on health care leadership.
  • Since 1997, the Certified Physician Executive ("CPE") credential of the American Association for Physician Leadership has served as "the leadership standard for quality leadership" across the health care industry.
  • The association claims to be the home association for certified physician executives.

Research Strategy

The research investigated the top industry associations for senior leaders of the United States hospital industry. This strategy examined some of the most relevant associations that senior healthcare leaders, such as managers, leverage to stay connected and deliver quality management services. Resources reviewed included healthcare management guides and similar resources. The research also examined associations that offer certifications for healthcare administrators and top management staff. Associations that attract senior leadership and healthcare executives were investigated from the uncovered lists and prioritized based on their membership statistics.
Part
02
of seven
Part
02

Industry Analysis: Hospital Industry Trade Shows

FIME, American Academy of Ophthalmology Annual Meeting & Exhibition, HIMSS Conference & Exhibition, and Medtrade are the top trade shows among US hospital executives. These trade fairs are well-attended by senior executives at hospitals.

FIME

  • Florida International Medical Expo (FIME) is the largest healthcare trade show in the US. It is also the most visited hospital-related trade fair.
  • At the trade show, new and refurbished medical devices and other hospital-related products are displayed by over a thousand companies.
  • Leaders at hospitals participate in this trade fair to find quality medical equipment for their facilities.
  • FIME is attended by over 18,000 professionals from more than 100 countries. A few years ago, the event reached a milestone as it saw over 52,000 attendees.
  • It typically takes place once in a year. In 2020, It will take place from June 23-25 at the Miami Beach Convention Center in Miami, Florida.

Medtrade

  • Medtrade is another well-known trade show that takes place annually in the US. Manufacturers and buyers of medical equipment are brought together at this trade fair.
  • The show also features up to 3,000 speakers who discuss hospital-related advancements and the regulatory environment in the US healthcare industry.
  • It will take place on March 3-4, 2020, at the Mandalay Bay Convention Center in Las Vegas, Nevada.
  • Over 2,500 healthcare professionals, including hospital executives, participate in the trade show.

HIMSS Conference & Exhibition

  • The HIMSS Conference & Exhibition is a top healthcare trade show in the US that attracts up to 40,000 attendees and over 400 exhibitors annually.
  • At the event, participants discover what is new in the healthcare industry.
  • HIMSS Global Health Conference & Exhibition claims it brings "world-class education, cutting-edge products and solutions, and unique networking opportunities."
  • It will take place from March 9-13, 2020, at the Orange County Convention Center in Orlando, Florida.

American Academy of Ophthalmology Annual Meeting & Exhibition

  • The American Academy of Ophthalmology Annual Meeting attracts over 28,000 physicians, health professionals, and specialty surgeons annually.
  • It is the largest exhibition of "ophthalmic technology, products and services" worldwide. In 2019, it took place in October, at Moscone Center, San Francisco.
  • In 2019, It is expected to take place in November at the Sands Expo/Venetian in Las Vegas.

RESEARCH STRATEGY

In order to determine the top trade shows for hospital leaders, we looked for pre-compiled lists of the most attended trade shows in the US. We then selected the ones that are highly regarded by hospital leaders and are most popular among these hospital leaders. We relied on three pre-compiled lists, by credible sources like TSNN.

Part
03
of seven
Part
03

Industry Analysis: Hospitals Key Players, Part 2

Three top hospitals in the United States based on revenue, are New York-Presbyterian, Cleveland Clinic, and Mayo Clinic. The requested information has been entered into the attached spreadsheet.

Top US Hospitals

Part
04
of seven
Part
04

Industry Analysis: Hospitals Key Players, Part 1

Five of the top hospitals in the United States, based on revenue, are UPMC, Weill Cornell Medicine, Stanford Hospital, New York University Langone Tisch Hospital, and UCSF Medical Center. The requested information has been entered into the attached spreadsheet.

Top US Hospitals

Part
05
of seven
Part
05

Industry Analysis: Hospital Management Consulting Spend

Companies in the United States's hospital industry together spent around $17.28 billion on management consulting fees in 2017. This amount and the industry's revenue that year suggest that annually, companies spend around 1.55% of their revenues on management consulting fees. An average amount is not useful in this case, as companies vary in size, and expenses vary from one company to another.

Management Consulting Spend of Hospitals

  • According to the United States Census Bureau, the country's hospital industry, represented by North American Industry Classification System (NAICS) code 622, generated a revenue of $1,114,639 million and spent $53,143 million on purchased professional and technical services in 2017. These figures suggest that, in that year, the industry spent approximately 4.77% of its revenue on professional and technical service purchases.
  • As the bureau defines purchased professional and technical services as outsourced "management consulting, accounting, auditing, bookkeeping, legal, actuarial, payroll processing, architectural, engineering, and other professional services," the amount the industry spent on management consulting fees must have been lower than $53,143 million.
  • Articles published by Consulting.us and the American Journal of Managed Care indicate that the size of the country's healthcare management consulting industry in 2017 was $45 billion, and that hospitals accounted for 38.4% of the country's healthcare consulting market. These figures suggest that, in that year, the country's hospital industry spent around $17.28 billion or 1.55% of its revenue on management consulting fees.
  • It would be misguided to divide $17.28 billion by 3,050, the number of companies in the country's hospital industry, because revenues and expenses vary from one company to another. The only logical conclusion that can be drawn from the aforementioned details is that companies in the country's hospital industry spend around 1.55% of their annual revenue on management consulting fees.
  • HCA Healthcare, LifePoint Health, Tenet Healthcare, Community Health Systems, and Universal Health Services, which are all publicly traded hospital systems in the country, do not provide granular breakdowns of their expenses, and thus their management consulting spend could not be reliably ascertained.

Research Strategy

To check if the desired information is readily available, we checked if surveys of hospitals and their expenses have been conducted in the past. We looked for samples of hospital budgets as well. Such surveys and budget samples could not be located in the public domain, however, and we quickly learned that information on the subject is very limited. Since the United States Census Bureau regularly conducts a survey of businesses in the country, we turned our attention to the bureau's data tables. The hospital industry is represented by NAICS code 622, so we looked for the corresponding revenue and expenses of NAICS code 622. Based on the bureau's latest Service Annual Survey, the country's hospital industry generated a revenue of $1,114,639 million and spent $53,143 million on purchased professional and technical services. These figures suggest that the country's hospital industry spent around 4.77% of its revenue on professional and technical service purchases.

Revenue: $1,114,639 million
Purchased professional and technical services: $53,143 million
Purchased professional and technical services as a percentage of revenue: ($53,143 million/$1,114,639 million) x 100% = 4.77%

These purchased professional and technical services are defined by the United States Census Bureau as "management consulting, accounting, auditing, bookkeeping, legal, actuarial, payroll processing, architectural, engineering, and other professional services" that were provided by individuals or organizations external to the company. Given this definition, it can be safely assumed that the industry and the companies within it spend less than 4.77% of revenue on management consulting fees each year.

To determine how much of the $53,143-million amount was accounted for by management consulting fees, we looked for reports on the healthcare consulting industry. Both Consulting.us and the American Journal of Managed Care have published articles on the subject, and from these articles, we were able to learn that the healthcare management consulting market in the country was worth $45 billion in 2017, and that hospitals accounted for 38.4% of the country's healthcare consulting market. Given these figures, it can be estimated that in 2017, the country's hospital industry spent $17.28 billion or 1.55% of its revenue on management consulting fees.

38.4% x $45 billion = $17.28 billion or $17,280 million
($17,280 million/$1,114,639 million) x 100% = 1.55%

Companies vary in terms of size, and expenses vary from one company to another, so it is unwise to divide $17.28 billion by 3,050, the number of companies in the industry. The only logical conclusion we can make is that companies in the industry spend around 1.55% of their annual revenue on management consulting fees.

The regulatory filings and disclosures of publicly traded companies in the country's hospital industry were also examined, as some companies might have provided detailed breakdowns of their expenses. We chose five companies from Fintel.io's list of publicly traded hospital systems, namely, HCA Healthcare, LifePoint Health, Tenet Healthcare, Community Health Systems, and Universal Health Services, and scoured these companies' websites, filings, and disclosures for information on management consulting spend. Unfortunately, these companies have not disclosed any information on management consulting spend, and their expense breakdowns are not as granular as desired. The lack of information may be attributed to the fact that companies are not obligated to disclose detailed breakdowns of their expenses.
Part
06
of seven
Part
06

Industry Analysis: Hospitals Market Size, Part 1

In 2019, the market size of the healthcare and social assistance industry segment was estimated to be $3.74 trillion. The predicted market size of the healthcare and social assistance industry for the next 3-5 years is $4.072 trillion, $4.172 trillion, and $4.3 trillion. Continue below for a deep dive into our key findings, research strategy, and calculations.

Healthcare and Social Assistance Industry; Market Size

  • The healthcare and social assistance industry is segmented into four subsectors: Ambulatory health care services (NAICS 621), hospitals (NAICS 622), nursing & residential care facilities (NAICS 623), and social assistance (NAICS 624).
  • In 2019, the market size of the healthcare and social assistance industry was estimated to be $3.74 trillion.
  • In 2018, the market size of the healthcare and social assistance industry was estimated to be $3 trillion.
  • In 2019, the United States ambulance services market size was estimated to be $18 billion.
  • In 2019, the United States hospital market size was estimated to be $1 trillion.
  • In 2019, the United States nursing and residential care facilities market size was estimated to be $2.72 trillion.
  • In 2019, the United States healthcare and social assistance market size was estimated to be $3.08 billion.

Healthcare and Social Assistance Industry; Predicted Growth

  • The compound annual growth rate (CAGR) for the healthcare and social assistance industry was predicted to be 2.8% for the next 3-5 years.
  • In 2018, the CAGR of the healthcare and social assistance industry was estimated to be 2.7%.
  • By 2022, the market size of healthcare and social assistance industry is predicted to be $4,072 billion.
  • By 2023, the market size of the healthcare and social assistance industry is predicted to be $4,172.5 billion.
  • By 2024, the market size of the healthcare and social assistance industry is predicted to be $4,302.91 billion.

RESEARCH STRATEGY

To locate the United States market size of the healthcare and social assistance hospital industry segment, we began by combing through government website like BLS reports. We were able to locate the market segmentation of healthcare and social assistance industry which are ambulatory healthcare services, hospitals, nursing & residential care facilities, and social assistance. There was no information regarding the market size of the overarching/large hospital industry. Information found was referencing work statistics like employment, union membership, and earnings.

Next, we scoured industry reports and press releases like IBIS World, MarketWire, and PR Newswire for information regarding the market size of healthcare and social assistance industry. We were able to locate the market size and CAGR of ambulatory healthcare services, hospitals, nursing, and residential care facilities, and social assistance. There was no information regarding the market size of the healthcare and social assistance industry. We went further to triangulate the request market size by summing the subsector's market size. This strategy was successful and has been used to report the requested information.

CALCULATIONS

Ambulance Services Industry

In 2019, the United States ambulance services market size was estimated to be $18 billion.
CAGR = 1.5%
The predicted market size of the ambulance services industry for the next 3-5 years (2022, 2023, and 2024)
Predicted period = 3, 4, and 5.
By 2022, the United States ambulance services market size is predicted to reach $18.82 billion.
By 2023, the United States ambulance services market size is predicted to reach $19.1 billion.
By 2024, the United States ambulance services market size is predicted to reach $19.39 billion.

Hospitals Industry

In 2019, the United States hospital market size was estimated to be $1 trillion.
CAGR = 3.6%
The predicted market size of the hospital's industry for the next 3-5 years (2022, 2023, and 2024)
Predicted period = 3, 4, and 5.
By 2022, the United States hospital's market size is predicted to reach $1.11 trillion.
By 2022, the United States hospital's market size is predicted to reach $1.15 trillion.
By 2022, the United States hospital's market size is predicted to reach $1.19 trillion.

Nursing and Residential Care Facilities

In 2018, the United States nursing and residential care facilities market size was estimated to be $2.65 trillion.
CAGR = 2.6%
Period = 1
In 2019, the United States nursing and residential care facilities market size was estimated to be $2.72 trillion.

The predicted market size of the nursing and residential care facilities for the next 3-5 years (2022, 2023, and 2024)
By 2022, the United States nursing and residential care facilities' market size is predicted to reach $2.94 trillion.
By 2023, the United States nursing and residential care facilities market size is predicted to reach $3 trillion.
By 2024, the United States nursing and residential care facilities' market size is predicted to reach $3.09 trillion.

Healthcare and Social Assistance Sector

In 2018, the United States healthcare and social assistance market size was estimated to be $3 billion.
CAGR = 2.7%
Period = 1
In 2019, the United States healthcare and social assistance market size was estimated to be $3.08 billion.

The predicted market size of the healthcare and social assistance industry for the next 3-5 years (2022, 2023, and 2024)
By 2022, the United States healthcare and social assistance market size is predicted to reach $3.34 billion.
By 2023, the United States healthcare and social assistance market size is predicted to reach $3.43 billion.
By 2024, the United States healthcare and social assistance market size is predicted to reach $3.52 billion.

Market Size of Overarching/Large Hospital Industry

The market size of the overarching/large hospital industry was calculated by summing the four-segment market size for the respective years.
Overarching/Large industry = Ambulatory health care services + Hospitals + Nursing & residential care facilities + Social assistance
2019 = $18 billion + $1,000 billion + $2,720 billion + $3.08 billion = $3,741 billion.
2022 = $18.82 billion + $1,110 billion + $2,940 billion + $3.34 billion = $4,072 billion.
2023 = $19.1 billion + $1,150 billion + $3,000 billion + $3.43 billion = $4,172.5 billion.
2024 = $19.39 billion + $1,190 billion + $3,090 billion + $3.52 billion = $4,302.91 billion.

CAGR

Initial value = $4,072 billion (2022)
Final value = $4,302.91 billion (2024)
Period = 2
CAGR = 2.8%
Part
07
of seven
Part
07

Industry Structure: Hospitals

The hospital industry is a segment of the "health care and social assistance" industry, according to the Bureau of Labor Statistics (BLS). Industries within the hospital industry provide diagnostic, medical, and treatment services (physician, nursing, and other inpatients' health services).

Structure of the Hospital Industry:

Overarching Industry: Health Care and Social Assistance

  • Establishments within the "health care and social assistance industry" provide health care and social assistance for individuals. The services provided by these establishments are delivered by trained professionals.
  • The arrangement of industries within the health care and social assistance industry is "a continuum starting with those establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance."
  • The industry is segmented into four subsectors: Ambulatory health care services (NAICS 621), hospitals (NAICS 622), nursing & residential care facilities (NAICS 623), and social assistance (NAICS 624).

Health Care and Social Assistance: Primary Segments by Revenue

Ambulatory Health Care Services:
  • The ambulatory health care services subsector provides "health care services directly or indirectly to ambulatory patients and does not usually provide inpatient services."
  • The annual revenue is US$ 1 trillion.
  • The number of establishments is 610,000 establishments.
  • Value-added as a Percentage of Gross Domestic Product (GDP): 3.7% in 2018. (Screenshot here).
Nursing and Residential Care Facilities:
  • According to the North American Industry Classification System (NAICS), the nursing and residential care facilities industry comprises establishments providing "residential care combined with either nursing, supervisory, or other types of care as required by the residents."
  • The care that these facilities provide is a mix of health/nursing and social services.
  • The annual revenue is US$ 240 billion.
  • The number of establishments is 89,000 establishments.
  • Value-added as a Percentage of Gross Domestic Product (GDP): 0.7% in 2018. (Screenshot here).
Social Assistance:
  • The industry is providing a wide range of social direct-to-client assistance services, not including residential or accommodation services.
  • The annual revenue is US$ 185 billion.
  • The number of establishments is 185,000 establishments.
  • Value-added as a Percentage of Gross Domestic Product (GDP): 0.7% in 2018. (Screenshot here).
Sources
Sources

From Part 01
Quotes
  • "These are some of the most relevant associations for Healthcare Managers and Administrators to stay at the leading edge of the Healthcare Industry."
Quotes
  • "The Healthcare Financial Management Association (HFMA) offers the CFHP. With more than 38,000 members, HFMA is the premier membership organization for healthcare finance leaders in the United States."
Quotes
  • "Generally, healthcare administration certification requires a bachelor’s degree, with some programs requiring a master’s degree. As noted, a few elementary certifications are available to those with an associate’s degree in healthcare administration or a high school diploma."
Quotes
  • "Certified professionals can attend the AAHAM Annual National Institute, held this year in Nashville, with 500+ fellow members and nearly 100 exhibitors."
Quotes
  • "For over 85 years, the American College of Healthcare Executives (ACHE) has focused on one mission—advancing leaders and the field of healthcare management excellence. We are the professional home to more than 48,000 healthcare executives who are committed to integrity, lifelong learning, leadership and diversity and inclusion."
  • "With today’s rapidly-changing healthcare environment, ACHE remains more committed than ever to being the preeminent professional society leaders can count on to help them gain valuable knowledge to improve health for their patients and their communities. In addition, through an established network of 77 chapters members have access to networking, education and career development at the local level. Members also can earn the prestigious, gold standard FACHE® credential, signaling board certification in healthcare management."
  • "Through The Foundation of The American College of Healthcare Executives, excellence is advanced with ongoing research and education, including the annual Congress on Healthcare Leadership. Each year over 4,000 participants gather to benefit from groundbreaking research and thought leadership, policy updates, and actionable innovations championed by their peers. The Foundation’s publishing division, Health Administration Press (HAP), is one of the largest publishers of books and journals on health services management, including textbooks for college and university courses. ACHE is also known for its magazine, Healthcare Executive."
Quotes
  • "Founded in 1928, AHIMA is the premier association of health information management (HIM) professionals worldwide. Serving 52 affiliated component state associations and more than 103,000 health information professionals, AHIMA is the leading authority for "HIM knowledge" and widely respected for its esteemed credentials and rigorous professional education and training."
  • "AHIMA is taking the lead in the advancement and use of health data and information management for the delivery of quality healthcare worldwide. AHIMA members stay one step ahead through AHIMA’s cutting-edge programs and professional development opportunities, including comprehensive continuing education."