Massachusetts hospitals report improved, healthy margins

Amid a tumultuous environment for hospitals, the finances of Massachusetts providers were mostly in the black last year, according to a report from the Massachusetts Center for Health Information and Analysis (CHIA). 

Fifty-four--or 87 percent--reported total positive margins, according to the numbers CHIA gathered on the 62 acute care facilities operating in the Bay State. The median margin statewide also increased slightly, from 4.1 percent in 2013 to 4.2 percent last year. Teaching hospitals had a significantly higher margin, at a median of 8.2 percent.

By contrast, community/disproportionate share hospitals (DSH) had a median margin of just 1.5 percent, although that was up from the 1.2 percent median reported for 2013.

Hospitals saw these improvements despite the fact that inpatient discharges actually declined 2.6 percent last year compared to 2013. 

The data was revealed as some hospitals in the state come under fire for reaping disproportionately larger shares of payments for providing the same care, leading lawmakers to propose capping payments. Many hospitals also have failed to comply with the state's price transparency law, which is intended to bring some financial relief to consumers.

Sturdy Memorial Hospital, a community/DSH hospital in Attleboro, had the highest total margin statewide of 17.3 percent, although more than half of that is due to non-operating factors, such as investments. Saint Vincent Hospital, a for-profit owned by Tenet Healthcare Corp. and based in Worcester, had the second-highest margin, at 15.6 percent.

"Saint Vincent's performance reflects our focus on providing high quality and cost effective care," Steve MacLauchlan, the hospital's CEO, told the Boston Business Journal. "Our efforts have included incorporation of clinical and operational best practices, which allow us to be a provider of choice for patients and payers."

By far, Quincy Medical Center had the lowest margin, at negative 57 percent.

Of the hospitals surveyed, 12 said they had current ratios below 1.0, an equation measuring profitability, liquidity and solvency and an indicator of the ability to meet current liabilities with current assets. Sturdy Memorial had the highest ratio, at 11.5.

To learn more:
- read the CHIA report (.pdf)
- check out the Boston Business Journal article