Annual net revenue and charges jumped at Pennsylvania's 182 hospitals in fiscal 2003, but 87 of the hospitals lost money. Over the past three years, 38% sustained losses, according to the latest reckoning by the Pennsylvania Health Care Cost Containment Council, a state agency that collects and reports healthcare information. Net revenue from hospital care grew 9% in fiscal 2003 ended June 30, three times the rate of general inflation in Pennsylvania, the council said in a new report. Charges skyrocketed 22% -- twice the rate of increase in expenses and almost 2 1/2 times faster than net revenue. Managed-care payments drove the increase in net revenue, according to the report.
"The sharp increase in managed-care reimbursements was consistent across commercial insurers, Medical Assistance and Medicare," Marc Volavka, the council's executive director, said in a news release. "One factor driving these increases is the fact that hospital charges are now more than three times greater than net patient revenue." Revenue from commercial insurers grew 14% compared with a 4% increase in Medicare revenue, the report said. Noting that 48% of the state's hospitals lost money in 2003 compared with 42% in 2002 and 34% in 2001, the Hospital & Healthsystem Association of Pennsylvania said the data point to "a long-term, systemic problem." Read the report. -- by Cinda Becker