Hospitals Industry Profile

The US hospital industry includes about 3,600 organizations that operate about 6,500 hospitals with combined annual revenue of about $860 billion. Major companies include Ascension Health, Catholic Health Initiatives, HCA (Hospital Corporation of America), Kaiser Permanente, and Tenet Healthcare. The industry is fragmented: the top 50 organizations generate about 30 percent of revenue.

Hospitals provide inpatient and outpatient services using specialized equipment. This industry doesn't include residential care facilities, outpatient care centers, or doctors' offices.

The world has about 17,000 hospitals. The vast majority are in Europe and North America. But the number of hospital beds per 10,000 population, as measured by the World Health Organization, is only tangentially related to a country's economic stability and wealth. The countries with the most beds per 10,000 people are North Korea, South Korea, Japan, and Belarus. The US has about 30 hospital beds per 10,000 people.

COMPETITIVE LANDSCAPE

Demand for hospital services is driven by demographics, illness and injury rates, and advances in medical care and technology. The profitability of individual companies depends on efficient operations, since many hospitals offer similar services, and customer perception, since in many cities hospitals compete for patients. Hospitals also compete for physicians, and seek to attract doctors with state-of-the-art equipment and an attractive work environment. Large companies have advantages in buying supplies, sharing best practices, and negotiating contracts with health insurers. Large hospitals may offer a wider variety ...