Hospital profits cut in half despite lower costs, rate increases

Oregon hospitals in 2008 had their worst performance in five years, earning half of the profit they enjoyed in 2007, according to audited financial data filed with the Oregon Office of Health Policy and Research.

The hospitals amassed more than $240 million in profit and collected more than 8 percent more in revenue, largely due to lowering costs and raising prices. Analysts say this has contributed to double-digit insurance rate increases.

"While the debate over healthcare reform has focused on regulating the insurance industry, there's been virtually no discussion by state or federal lawmakers about reining in hospital charges, which account for more than 30 percent of healthcare spending in this country," said the Lund Report, an Oregon-based consumer watchdog group.

The average hospital operating margin in 2008 was 1.6 percent on an average $131 million operating revenue. Average net income was $4.3 million.

To learn more:
- read the Lund Report