Pennsylvania's acute-care hospitals saw a second straight year of falling profitability in fiscal 2009, including a steep drop-off in total profit margins, despite increases in patient revenue from payers that year, a new study has found.
Pa. hospital profits continue fall in '09
The Pennsylvania Health Care Cost Containment Council reported in its annual review of statewide hospital finances that total profit margins at the state's 172 general acute-care hospitals dropped to 2.1% in fiscal 2009, down from 4.7% the year before and 6.6% two years ago. Operating margins declined to 3.5% from 4% the year before.
Hospitals saw an increase of 7.9%, or $1.13 billion, in net patient revenue from commercial payers between 2008 and 2009, which equated to an 8.7% increase in average revenue per discharge from the private insurers. Medicare revenue rose more slowly, with federal net patient revenue growth of 4.5%, or $519 million, and 5.5% growth in revenue per discharge.
In a news release, the Hospital and Healthsystem Association of Pennsylvania emphasized the report's findings that 44% of the state's hospitals had negative total margins in 2009, and that hospital uncompensated care grew $59 million in 2009, for a total of $807 million. “Pennsylvania hospitals' aggregate financial health has experienced a significant decline,” association President and CEO Carolyn Scanlan said in a statement.
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