With expenses outpacing revenues, Pennsylvania hospitals operated on thinner profit margins in 1993, a new report shows.
In its third report on the financial position of Keystone State hospitals, the Pennsylvania Health Care Cost Containment Council documented the overall decline in operating margins statewide. The 1993 data reflect the financial performance of 276 acute-care and specialty hospitals, five fewer than 1992 because of closures and other reporting differences.
The report also provides financial results for individual hospitals, most of which had a positive operating margin and many of which continue to record solid bottom lines.
Overall, average net income dropped to $435.5 million in 1993 from $656.8 million in 1992. Hospitals' average net profit margin slipped to 2.2% from 3.1%, while the average operating margin slid to 1% from 1.7%.
Net patient revenues rose 4% to $16.8 billion from $16.1 billion while total operating revenues increased by the same proportion to $17.6 billion from $16.8 billion. Total expenses, exceeding revenue gains, rose about 5% to $17.3 billion from $16.4 billion.
According to the council's report, the Hospital of the University of Pennsylvania had the highest profit, posting net income of $119 million in 1993, up from $53.9 million in 1992. North Philadelphia Health System reported the largest losses in the state: $10.5 million in 1993 and $14.5 million in 1992.