Chart 4.1: Percentage of Hospitals with Negative Total and Operating Margins,

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Chart 4.1: Percentage of Hospitals with Negative Total and Operating Margins, 1995 2014 45% 40% 35% Negative Operating Margin 30% 25% 20% 15% Negative Total Margin 10% 5% 0% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Chart 4.2: Aggregate Total Hospital Margins and Operating Margins, (2) 1994 2014 10% 8% 6% Total Margin 4% 2% Operating Margin 0% 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Total Hospital Margin is calculated as the difference between total net revenue and total expenses divided by total net revenue. (2) Operating Margin is calculated as the difference between operating revenue and total expenses divided by operating revenue.

Chart 4.3: Distribution of Outpatient vs. Inpatient Revenues, 1994 2014 100% 90% Percentage of Revenue 80% 70% 60% 50% 40% 30% 20% 10% Gross Inpatient Revenue Gross Outpatient Revenue 0% 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Chart 4.4: Annual Change in Hospital Operating Revenue and Expenses per Adjusted Admission, 1994 2014 10% Change in Total Expenses Change in Operating Revenue 8% 6% 4% 2% 0% -2% 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 An aggregate measure of workload reflecting the number of inpatient admissions, plus an estimate of the volume of outpatient services, expressed in units equivalent to an inpatient admission in terms of level of effort.

Chart 4.5: Distribution of Hospital Cost by Payer Type, 1980, 2000, and 2014 Non-patient, 2.7% Non-patient, 2.8% Non-patient, 2.1% Uncompensated Uncompensated Uncompensated Care, (2) 5.1% Care, (2) 6.0% Care, (2) 5.3% Private Payer, 41.8% Private Payer, 38.7% Private Payer, (3) 33.1% Other Government, 6.1% Medicaid, 9.6% Other Government, 1.4% Medicaid, 12.8% Other Government, 1.7% Medicaid, 17.6% Medicare, 34.6% Medicare, 38.3% Medicare, 40.2% (4) (4) (4) 1980 2000 2014 Non-patient represents costs for cafeterias, parking lots, gift shops and other non-patient care operating services and are not attributed to any one payer. (2) Uncompensated care represents bad debt expense and charity care, at cost. (3) Private payer formulas were updated in 2014 to account for the change in bad debt calculations, which is now reported as a deduction from revenue rather than a expense. (4) Percentages were rounded, so they do not add to 100 percent in all years.

Chart 4.6: Aggregate Hospital Payment-to-cost Ratios for Private Payers, Medicare, and Medicaid, 1994 2014 150% Private Payer 140% 130% 120% 110% 100% 90% 80% 70% Medicaid Medicare (2) 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Includes Medicaid Disproportionate Share payments. (2) Includes Medicare Disproportionate Share payments.

Chart 4.7: Hospital Payment Shortfall Relative to Costs for Medicare, Medicaid and Other Government, 1997 2014 Billions $5 $0 -$5 -$10 -$15 -$20 -$25 -$30 -$35 -$40 -$45 -$50 -$55 -$60 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Medicare Medicaid Other Government Costs reflect a cap of 1.0 on the cost-to-charge ratio.

Chart 4.8: Income from Investments and Other Non-operating Gains as a Percentage of Total Net Revenue, 1994 2014 5.0% Percentage of Total Net Revenue 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Non-operating gains include income from non-operating activities, including investments, endowments and extraordinary gains, as well as the value of non-realized gains from investments.

Chart 4.9: Number of Bond Rating Upgrades and Downgrades, Not-for-profit Health Care, 1995 2015 70 50 30 10-10 Upgrades Downgrades -30-50 -70 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Source: Email correspondence with Moody s Investors Services.

Chart 4.10: Median Average Age of Plant, 1994 2014 12 10 8 8.6 8.8 8.9 9.2 9.3 9.2 9.4 9.7 9.8 9.8 9.8 9.9 9.8 9.8 9.6 9.8 10.1 10.3 10.9 10.1 10.2 Years 6 4 2 0 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Source: Optum, Almanac of Hospital Financial and Operating Indicators, 2005, 2008, 2009, 2010, 2011, 2013, 2014, 2015 and 2016 and CHIPS, The Almanac of Hospital and Financial Operating Indicators, 1994 and 1996-7.

Chart 4.11: Percent Change in Employment Cost Index, All Private Service Industries, All Health Services and Hospitals, 2006 2015 (2) 5% 4% Hospitals All Health Services 3% All Private Service Industries 2% 1% 0% 06 07 08 09 10 11 12 13 14 15 Source: Bureau of Labor Statistics, Employment Cost Index, 12 months ending December 2015. Link: www.bls.gov. Total compensation. (2) Data represent annualized 12 month percent change.