Pennsylvania hospitals posted a 19% increase in net income to $525.9 million in 1991, a new report shows. Net patient revenues rose 11% over the previous year's total to $14.2 billion.
The Pennsylvania Health Care Cost Containment Council's second annual hospital financial report, released last week, indicated that, as a group, hospitals have a strong bottom line. However, the average operating profit margin was a modest 0.5% in 1991. Still, that was an increase from the -0.5% operating margin posted in 1990.
And the financial performance of individual hospitals varied widely.
"It is an institution's financial performance over time, as reflected in this new report, that contains the most reliable information for prediction and decisionmaking," said Ernest J. Sessa, the council's executive director. "In analyzing trends, critical attention must be focused on the direction and the rate of change in these financial measures."
The report gives fiscal 1991 data for 285 facilities and fiscal 1990 data for 290 hospitals. Because of mergers and closures, the latest data cover five fewer facilities.
The report presents a good snapshot of hospitals' 1990 and 1991 performance, said Louis Gable, a spokesman for the Hospital Association of Pennsylvania. But since 1991, the state has enacted changes in reimbursement for workers' compensation and healthcare coverage under automotive insurance policies that effectively reduce payments to hospitals. The impact of those changes won't be quantified until hospitals' 1993 audited financial data are assessed, he said.
The Pennsylvania Health Care Cost Containment Council plans to release another financial report within the next year that will provide data for fiscal 1990 through 1993. The council is an independent state agency created to track healthcare costs and quality.