Demand will strengthen as healthcare reform takes full effect in the next five years
Los Angeles, CA (PRWEB) April 03, 2013
Although children's specialty hospitals represent less than 5.0% of all hospitals in the United States, they are the backbone of the pediatric healthcare infrastructure. Due to the indispensable nature of services provided by these hospitals, industry demand has remained strong over the past five years. Furthermore, children's hospitals benefit from a unique mix of revenue sources. “Unlike adults, the vast majority of children have some type of health insurance coverage, either through their parents' private, employer-sponsored plans, Medicaid or the Children's Health Insurance Program,” says IBISWorld industry analyst Anna Son. “As a result, the number of uninsured children has fallen dramatically since 1987, further bolstering demand for and affordability of hospital services.” During the five years to 2013, IBISWorld estimates that revenue for the Children's Specialty Hospitals industry will increase at an average annual rate of 3.3% to $23.3 billion, including an anticipated 4.0% jump in 2013.
Nevertheless, the Children's Specialty Hospitals industry has faced some headwinds along the way. On average, children's hospitals devote more than half of their patient care to children reliant on Medicaid, while receiving only about 78.0% of the total cost of the care provided to Medicaid patients, according to the National Association of Children's Hospitals and Related Institutions. Furthermore, while Medicaid is spared at the federal level, a number of states continue to pressure the program locally, thus exposing the industry to potential risks relating to changes in Medicaid reimbursement. “In addition, the ongoing shortage of physicians and nurses in children's hospitals hampers patient treatment by delaying care,” adds Son. “As a result of this shortage, hospitals incur high labor costs to recruit and retain qualified medical personnel.”
The industry has a low market share concentration and is characterized by many small-scale, geographically dispersed participants. This low concentration indicates that the industry is highly fragmented and that there is significant scope for facility expansion by some of the industry's major players, including Children's Hospital of Philadelphia and Children's Medical Center of Dallas. Lucile Packard Children's Hospital is currently looking to expand its existing facilities, with a goal of adding 104 new beds by 2017. IBISWorld estimates that market share concentration has increased over the five years to 2013, as many participants experienced a severe drop in revenue during the economic downturn.
Over the five years to 2018, healthcare reform, reimbursement trends and medical personnel shortages will continue to shape the industry. Demand for hospital services is expected to remain strong, driven by the rising prevalence of chronic conditions among school-aged children, such as asthma, obesity, diabetes and congenital anomalies. The industry will also benefit from an influx of 32.0 million previously uninsured people who will gain healthcare coverage due to healthcare reform, thus reducing the number of patients who are unable to afford paying their hospital bills. For more information, visit IBISWorld’s Children's Specialty Hospitals in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes hospitals that provide diagnostic and medical treatment (surgical and nonsurgical) to inpatients who are typically aged 21 and younger. These hospitals treat a specific type of disease or medical condition (except psychiatric conditions or substance abuse), maintain inpatient beds and provide patients with food services and other services (e.g. outpatient services, X-ray services, laboratory services, operating room services and pharmacy services).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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