State of PA Describes Financial Status of Acute Care Facilities
The Pennsylvania Health Care Cost Containment Council (PHC4) released a report detailing the financial state (pdf) of general acute care hospitals across the State during 2007, contained in the report “Financial Analysis 2007- Volume One”.
The report notes that the financial health of these institutions increased during the 2007 fiscal year. Improvements were noted in both operating and non-operating income. However, the amount of uncompensated care during this year also significantly increased. That increase is marked at 12.2 percent and totaled $678 million.
As well, the percentage of overall patient revenue that is attributed to uncompensated care increased from 2.17 percent to 2.27 percent. Notably, this is the highest point since 2002.
While this data initially suggests that the financial health of hospitals across the state is improving, there are still many institutions with financial hardship. During 2007, 25 percent of facilities lost money; more than forty hospitals had negative margins in 2007. Most of those facilities are small or medium-sized and serve rural areas of the State. Almost half of the small community hospitals had negative operating margins.
Overall operating margins, alternatively, increased during the last fiscal year. Those jumped from 5.39 percent to 6.51 percent in 2007. The average operating margin across the State, likewise, increased.
A larger proportion of hospital revenue is being received from commercial health insurers; a trend that is continuing from the previous fiscal year. Medicare payments were 37.1 percent of of total revenue. In addition, the majority of the revenue increase is from outpatient clinics.
June 16, 2008 Related topics: Finance, Facilities, Trends