Colorado hospitals had a good year in 1996.
Aggregate profits for the state's 64 acute-care hospitals jumped 20% to $296.5 million from $246.6 million in 1995. Their total profit margin rose to 7.9% last year from 6.9% in 1995.
The American Hospital Association has yet to release its annual report on hospital utilization and finances nationwide for 1996. The AHA said hospitals nationally had a 5.6% total profit margin in 1995, and a spokeswoman said the association expects about the same margin for 1996.
The Colorado Hospital Association released its report on the state's hospital utilization and finances last week.
The improvement in the profitability of Colorado hospitals is impressive in a managed-care environment, said Dean Coddington, a Denver healthcare consultant with Moore Fischer Coddington.
"This area has continued to grow, and year after year the financial performance of the hospitals has surprised me," Coddington said. "I thought with the growth of managed care that the hospitals' financial performance would decline. It tells me they're doing a pretty good job of figuring out how to cope."
According to the report, hospitals held the line on expenses, which increased about 4% to almost $3.5 billion. Hospital admissions grew by 2%, the same rate as the population.
Uncollected charity-care charges increased almost 12% to $244 million, while total uncollected charges in 1996 were $2.4 billion.
Based on total margins, two rural Yuma County hospitals-one with 11 beds and another with 16-were the most profitable in Colorado last year.
Yuma District Hospital and Wray Community District Hospital posted total profit margins of 29.6% and 18.5%, respectively.
Dan Dennis, administrator at Wray Community, said that figure exaggerates the performance of his small hospital. He said more than $827,000 in tax subsidies inflated the hospital's total margin. In fact, the hospital lost $167,467 on patient care last year, he said.
He said the hospital is using its tax subsidy to pay off $6.5 million it borrowed to build a new hospital. That way, the cost doesn't get factored into patient charges. Wray Community had 1996 aggregate profits of $871,000.
Yuma Administrator Michael Clark said his hospital's total margin of $1 million reflects tax subsidies, interest income and fund raising. "It's still good that this community supports its hospital," Clark said.
When looking at aggregate profits alone, the two top hospitals are 340-bed Memorial Hospital, Colorado Springs; and 290-bed Centura Health St. Anthony Hospitals, Denver.
Last year Memorial earned $23.4 million in profits for a 12.4% margin, and Centura Health St. Anthony earned $21.7 million for a 10.7% margin.
For the first time, the association's report contained data from hospital systems. The two organizations included, Centura Health and Columbia Health-One, were the only systems in operation for all of 1996. Centura posted profits last year of $45.6 million for a 5.2% margin, while Columbia earned $19.9 million for a 2.3% margin.
System data included ambulatory services, long-term care, physician operations and hospitals. Data were from seven Centura hospitals and six Columbia hospitals, two of which operate under a single license.