Margins at PA hospitals drop sharply

Call it the bad news wire. Another state hospital association--this time Pennsylvania's--has come out with a report documenting that its financial metrics are at record lows.

The Hospital & Healthsystem Association of Pennsylvania's (HAP) new report suggests that the total margin for hospitals fell to a scary negative-6.3 just over the period between July 2008 and December 2008. That's down 12 percent over the couple of years. Among the forces pushing down margins are decreases in elective surgeries, a growth in behavioral health visits and higher use of emergency departments by the under- and uninsured.

While there's no business on earth that can run in the negative for long, this is especially bad stuff for hospitals, who come more or less to a standstill when they're in no position to get the capital that keeps them growing.

HAP, not surprisingly, is using the data to make the argument that state lawmakers should restore more than $75 million in state and federal Medicaid hospital funds, which were cut back from the governor's 2009-2010 state budget. HAP is predicting that its members will end up cutting staff or reducing/closing services if something doesn't change.

To learn more about HAP's statistics:
- read this HAP press release

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