Colorado hospitals once again made significantly more money than the national average in 1995, reporting a statewide total profit margin of 6.9%.
U.S. hospitals' average total margin was 5.1% in 1995, according to early data.
In a departure from national trends, most of Colorado hospitals' profits stem from patient care, which yielded a 5.5% margin. In national studies, patient care resulted in a -0.4% margin in 1995.
The Colorado data are contained in a new report from the Colorado Hospital Association. It reflects the performance of 65 acute-care hospitals (See chart).
National data comes from the American Hospital Association's quarterly survey of 2,000 hospitals (May 20, p. 3). An annual survey, involving most acute-care hospitals, will be released next spring. Although final results often differ, the quarterly report is a good indicator of industry trends.
At least one major inconsistency exists in how the AHA and the CHA calculated patient-service margins. The AHA used patient-care revenues only, excluding other sources of operating revenues. The CHA uses total operating revenues in its calculations. If it followed the AHA practice, Colorado hospitals would have shown a patient-care margin of 5.7%.
Other differences in the associations' definitions of patient-service margins also could exist. CHA officials, however, weren't available to discuss the CHA study.
Total margins appear to be measured similarly.
Last year was at least the fifth consecutive year in which Colorado hospitals' average total margin topped 6%. Only 1992 was more profitable when the average margin hit 7.1%.
Expenses grew 4.1% in 1995, up from 3.1% in 1994. That's still better than the national average of 5.3%, according to the AHA.
Another sign of Colorado hospitals' success at controlling expenses is their loss on Medicare payments. Medicare reimbursement in Colorado equaled 88.8% of the cost of treatment in 1995, compared with 86.4% in 1994. There was no change in payment rate, the CHA said.