KANSAS CITY, Mo.-Aggregate profits and total profit margins generated by area hospitals declined in 1993 despite an 8% jump in total revenues.
Revenue growth was more than offset by hospital expenses, which rose 9.1% in 1993, according to a report by the Kansas City Area Hospital Association.
"One thing I saw that is very distressing is the proportion of hospitals losing money on patient care," said Carol Grimaldi, vice president for member relations at the association. That has been consistent over the last six, seven, eight years."
More than half the 32 hospitals in the survey reported negative profit margins on patient care in 1993. Overall, operating margins, which take into account other sources of operating revenues, are positive but have exceeded 3% only once since 1987.
"When you look at what's happening in Congress with budget reconciliation, how Medicare and Medicaid are being financed, it raises a great deal of uncertainty, not just in this market but in others," Grimaldi said.
Still, the Kansas City-area hospitals posted a 4.6% total profit margin in 1993, slightly ahead of the 4.4% total profit margin that hospitals generated nationally that year, according to the American Hospital Association.
In total, Kansas City-area hospitals earned about $93.3 million in 1993 on revenues of about $1.3 billion. That's down from an aggregate profit of about $104.2 million on revenues of about $1.9 billion in 1992.
The Kansas City association's report also found:
The staffed-bed occupancy count for the metropolitan area has dropped about 1% annually for the past six years, to 59.1% in 1993.
Discharges, after declining steeply in 1990 and 1991, are leveling off. Discharges dropped 1.3% in 1992 and 0.8% in 1993.
The average length of stay rose 0.1% in 1993 to 7.1 days. In 1987 it was 7.4 days.
Medicare discharges have remained steady over six years, while Medicaid discharges rose 159% to 29,380 in 1993, from 11,301 in 1987.
The percentage increase in payroll and benefits has declined to 6.5% in 1993 from 11.6% in 1989. However, wages and benefits per full-time-equivalent employee have risen steadily to $35,878 in 1993. Wage increases have outpaced the consumer price index.
These statistics appear in a booklet called Vital Signs recently published by the association. Its purpose, Grimaldi said, "is to provide the public, business and government up-to-date hospital utilization and financial data.
"If it gets people thinking and talking about healthcare and what constitutes healthcare financing, we've succeeded," she said.