PA hospitals' margins up, but uncompensated care rises

A new report from the Pennsylvania Health Care Cost Containment Council concluded that the overall financial health of the state's hospitals improved, though uncompensated care levels rose faster than the statewide increase in net patient revenue. The agency found that many of the state's 170 hospitals improved their performance in fiscal 2007, though the rising cost of uncompensated care was a big issue. All told, the hospitals' total income margin grew by more than a full percentage point in fiscal 2007, from 5.39 percent in 2006 to 6.51 percent in fiscal 2007. Meanwhile, uncompensated care was up $74 million this year, or 12.2 percent, to $678 million, climbing from 2.17 percent in fiscal 2006 to 2.27 in fiscal 2007.

Among the best performers in the state was the University of Pennsylvania Health System, whose dominant hospital, Hospital of the University of Pennsylvania, made almost $215 million from patient care last year, along with another $55 million in investment and endowment income. The hospital's operating margin was a whopping 14.28 percent in an area where 4 to 5 percent margin is considered a reasonable result. At the other end, Tenet-owned Hahnemann University Hospital had an operating margin of negative 18 percent, a loss of $65 million. About one-quarter of the state's hospitals posted negative total margins for fiscal 2007. Generally speaking, small community hospitals in rural areas didn't perform as well as larger ones in more urban areas.

To find out more about the state's hospital market:
- read this article from The Philadelphia Inquirer
read this press release from the state

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