Healthcare Insights

What are the average liabilities on a hospital’s balance sheet?

In the United States, healthcare providers and organizations that participate in the Medicare and Medicaid programs are required to submit financial results to the Centers for Medicare and Medicaid Services (CMS). As part of that submission process, these organizations submit details about the assets and liabilities that they hold on their balance sheets.

In general, liabilities are financial obligations that an organization owes to someone else. Liabilities include things like accelerated payments, deferred income, short and long-term notes payable, and more. Often the liabilities on a balance sheet are attributable to an asset also on that balance sheet. For example, if a hospital borrows money from a bank to build a new outpatient facility, the mortgage owed to the bank becomes the liability, and the value of the new building goes into the asset section of the organization’s balance sheet.

As the data below shows, there was a significant increase in healthcare organizations’ liabilities between 2019 and 2021. The COVID-19 pandemic was the primary driver for these changes. With patients delaying care and hospitals seeing dramatic cost increases due to labor shortages and supply chain disruptions, hospitals’ financial situations worsened.

Average hospital liabilities 2019-2021

Metric 2019 average 2020 average 2021 average Explore dataset
Accelerated payments $8,172,524 $30,646,631 $27,525,365 Explore
Deferred income $4,446,658 $13,871,842 $11,109,545 Explore
Due to other funds $10,046,436 $3,997,467 $17,270,807 Explore
Notes and loans payable (short term) $9,544,750 $10,636,034 $10,419,710 Explore
Notes payable $84,999,797 $95,232,994 $91,371,061 Explore
Other current liabilities $33,367,927 $51,720,271 $46,804,891 Explore
Other long-term liabilities $95,183,226 $120,178,056 $112,075,654 Explore
Salaries, wages, and fees payable $12,898,460 $20,017,106 $21,413,972 Explore
Total current liabilities $81,113,461 $105,630,276 $107,672,630 Explore
Total liabilities $202,627,687 $253,925,945 $246,895,530 Explore
Total long-term liabilities $138,035,279 $164,325,539 $154,891,766 Explore

Fig. 1. Data is from Definitive Healthcare’s Atlas Reference & Affiliation Dataset. Data accessed on May 23, 2023.

Which hospital type has the highest average total liabilities?

In general, health systems hold the highest total liabilities on their balance sheets due to their size but for the sake of this report we took a look at the organizations below the health system level to understand their total liabilities. According to our data, in 2021, children’s hospitals had the highest average total liabilities at $1.9 billion, followed by short-term acute care hospitals at $623.2 million. This is predominantly due to some of the larger children’s hospitals in the U.S., like Boston Children’s Hospital and Children’s Hospital of Philadelphia, not being affiliated with a health system and having high total liabilities.

Which region’s healthcare organizations have the highest average total liabilities?

The Northeast had the highest average total liabilities of all regions across the U.S. in 2021, with $404 million. The region with the second-highest average total liabilities was the West, with around $321 million. These numbers are closely correlated with the average CBSA population for those regions suggesting that facilities that support larger populations need to have a larger asset/liability base to provide care in that region.

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