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Mass. hospitals seeing average margin rise even as some face difficulties


By Rachel Landen
Posted: May 19, 2014 - 4:00 pm ET
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Despite losses posted at 11 of Massachusetts' 64 acute-care hospitals last year, average margins at facilities across the state generally improved in 2013.

On average, the total margin—the excess of total revenues over total expenses—rose from 3.8% in fiscal 2012 to 4.1% in fiscal 2013, according to a report released this month by the Center for Health Information and Analysis (PDF). Using financial data from the period ended Sept. 30, which is the year-end date for the majority of Massachusetts hospitals, the report examined and compared the profitability, liquidity and solvency for each of the state's acute-care facilities.

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Results fluctuated across geography, with the lowest margin of 0.5% in the Lower North Shore region—northeast of Boston—and the highest margin of 8.9% in the Fall River region—southeast of Providence, R.I.

Performance also varied across hospital type and payer mix. The total margin for the state’s six academic medical centers climbed to 4.6% from 3.6% in the previous year. But for the 23 community hospitals serving a disproportionate share of patients covered by government programs that include Medicare and MassHealth, the margin dropped to 3.6% from 5.6%.

The biggest loss occurred at North Shore Medical Center in Salem, Mass., one of the disproportionate share community hospitals. The not-for-profit lost $20.3 million in 2013.

Conversely, Boston Children’s Hospital, a specialty not-for-profit hospital, posted a surplus of $157.7 million, the highest of any in the state. Other hospitals breaking the $100 million profit mark included Beth Israel Deaconess Medical Center, Brigham and Women’s Hospital, and Massachusetts General Hospital, all in Boston, and Baystate Medical Center, Springfield.

These five also each had a current ratio greater than 1.0, indicating that their current liabilities could be covered by their current assets. Forty-nine of the 64 hospitals reported current ratios of at least 1.0, suggesting short-term financial stability for 77% of Massachusetts’ acute-care facilities.

Follow Rachel Landen on Twitter: @MHrlanden


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