Half of community hospitals operating at 2% margins or less

Almost half (49 percent) of community hospitals in the United States are operating at margins of 2 percent or less, according to a recent report from healthcare IT provider Anthelio Healthcare Solutions, presented at last month's annual Community Hospital 100 conference in Pinehurst Resort, N.C. More than one-fifth of the hospitals (22 percent) are operating in the red with negative margins.

Not all of the community hospital executives surveyed reported losses though. About a quarter (23 percent) said they have more than an impressive 4 percent operating margin, and another 27 percent reported 2 to 4 percent.

As the largest sector of the healthcare system, community hospitals make up 73 percent of total hospitals with 300 or more beds.

"In order to offer quality healthcare to their community, these hospitals must ensure solid financial performance and operational efficiency," the report states.

However, operating costs have increased by more than 5 percent during the past three years, according to the report, which could prove challenging for these institutions. In addition, more hospitals are feeling the reductions in Medicare and Medicaid payments. Sixty-seven percent reported reductions of under $5 million, and another 50 percent reported reductions of under $3 million. Fourteen percent of community hospitals said they've witnessed reimbursement reductions of more than $10 million.

In the wake of their finances and reform, community hospitals also said they are taking on new initiatives: electronic medical record (EHR) implementation (69 percent), ICD-10 conversion (95 percent), and participation in health information exchanges (43 percent).

For more information:
- read the report (.pdf)

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