Healthcare industry CFOs are expecting revenue growth but flat profits, according to a recent survey by GE Capital, Americas.

At the beginning of the year, GE Capital found healthcare CFOs to be the most pessimistic about the health of their respective industry, but a slight uptick of optimism recorded in the third quarter of this year pushed them past retail for the bottom spot.

Ironically, the number one threat perceived by healthcare CFOs related to the health of their industry is … employee healthcare costs.

GE Capital surveyed 92 CFOs from mid-market organizations (average revenues of $117 and 820 employees). It found that a whopping 87 percent of CFOs listed healthcare costs as the number one concern in the coming months. It also discovered that while healthcare CFOs more bullish then their counterparts in other industries, the outlook for next year was still soft.

“While the Supreme Court’s affirmation of the majority of the Affordable Care Act (ACA) has removed a significant amount of the uncertainty facing the healthcare industry, the CFO survey illustrates the fundamental challenges facing the industry,” writes Jeff Englander, senior healthcare industry analyst for GE Capital. “The majority of healthcare CFO’s surveyed look for improved industry growth and increased revenues, but expect profits to remain the same as the prior year, potentially indicating margin pressure due to reform. Faced with increased growth but potentially tight profits, healthcare survey participants lead all industries in considering financing to support working capital.”

Collectively healthcare CFOs surveyed perceived that their industry was healthier than earlier in the year, but only as healthy as all other industries on average (5.8 on a scale of 1 to 10).  Only retail is collectively more pessimistic about the health of its respective industry.

Among the results found by the GE Capital survey:

  • Economic growth – Healthcare CFOs are shifting their expectations for the U.S. economy from growth to stable over the next 12 months. Fifty-three percent expect the economy to remain the same, a 29-percentage point increase, while thirty-three percent expect the U.S. economy to grow, a decrease of 29 percentage points.
  • Industry growth – Healthcare is the only industry to increase expectations for industry growth over the next 12 months (38 percent, up 13 percentage points). The overall average is 30 percent.
  • Profits – Forty-seven percent expect profits to remain the same this year versus last year. Twenty-five percent expect profits to decrease, down nine percentage points.
  • Revenues – Forty-nine percent expect their revenues to increase in 2012 versus the previous year, a drop of seven percentage points.
  • Long-term growth – Healthcare CFOs showed the greatest decrease in likelihood to downsize over the next 1 – 3 years, going from 23 percent in the first quarter to 12 percent today. Forty-six percent expect to be in a moderate growth phase, an increase of 18 percentage points.
  • Hiring – Fifty-four percent expect to hire in the next 12 months, down 20 points.
  • Additional financing – Thirty-five percent are considering additional financing over the next 12 months to support equipment needs, up nine points. Twenty-eight percent are considering additional financing for working capital, up 11 points.

For more information about the GE Capital, Americas, survey, visit