Flat admissions, reimbursements drive down hospital margins

Hospitals and clinics in the Minneapolis-St. Paul area saw their margins squeezed during 2011, reported the St. Paul Pioneer Press.

Although revenue for the region's largest healthcare systems grew about 5 percent during 2011 and topped $11 billion, operating income fell more than 20 percent to $288 million, down from $363 million in 2010, according to the article. The poor performance was attributed to flat admissions and little or no growth in reimbursement from payers.

Altogether, the region's biggest providers reported operating margins that averaged about 2.6 percent last year, compared to 3.5 percent in 2010, according to the Pioneer Press.

The biggest slice of operating income was reported by Allina Health System, which saw $171.8 million in operating income on revenue of $3.2 billion, noted the article. By contrast, Fairview Health System reported just $16.7 million in operating income on revenue of $3 billion.

Statewide, Minnesota's hospitals have been relatively healthy, posting net income of $1.2 billion on revenue of $16.7 billion in 2010, reported MedCity News.

To learn more:
- read the Pioneer Press article
-here's the MedCity News article

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