Dogged by investment losses, RI hospitals lose money in 2008

Rhode Island's hospitals lost money in 2008, not surprising given the depressed state of the overall U.S. economy, a new report notes.

The report, which was published by the Rhode Island Department of Health, looked at the financial performance of the state's 13 hospitals from 2005 to 2008. While in 2007, the state's hospitals did better than others in the Northeast, they saw a 12 percent loss in net worth during 2008.

The decline was attributable to investment losses, not decreases in patient revenue. Actually, patient revenue went up 6 percent from 2007 to 2008, but it wasn't enough to offset investment declines. Non-operating income, i.e. income from investments, fell from $80 million to $20 million during this period, while operating income increased from $22 million to $23 million.

Other signs of worsening financial health included a decline in cash balances, which dropped from 30 to 25 days, and working capital weakening from 1.42 to 1.35. Interestingly, collections improved from 47 to 45 days over the period--despite the recession--and bills were settled slightly faster.

The report also noted that hospitals within health systems did better financially than independent hospitals in the state, based on 12 independent measures of health taken over four years.

To learn more about the report:
- read this Healthcare Finance News article
- read this Rhode Island Department of Health press release
- read the report (.pdf)

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