Income Up for Pennsylvania Hospitals

May 17, 2012

The Pennsylvania Health Care Cost Containment Council (PHC4) released data today showing income for Pennsylvania's General Acute Care (GAC) hospitals increased more than 1.6% for the fiscal year ending June 30, 2011. It marks the second year in a row that total margins increased after two years of a steady decline.

PHC4 spokesperson Gary Tuma said Acute Care hospitals are "vital community assets."

"It's important for the people in the community to know whether their hospitals are financially healthy or not," Tuma said. "They have to be healthy in order to provide high quality service to patients, so the strong picture this year is a good sign after several years in which they lost money."

Acute Care hospitals are facilities that provide services to patients who need more than 24 hours of hospitalization. There are 165 such hospitals in the commonwealth.

Although Acute Care hospitals showed an increase in operational and total margins across the state, PHC4 documented a substabtial increase in uncompensated services.

"Hospitals in Pennsylvania provided close to one billion dollars worth of care for which they were not paid," Tuma said.

Tuma said the $990 million in unpaid bills can be traced to charity care and uncollectable bilss. That's an increase of about $100 million over the 2010 fiscal year. The trend in uncompensated care has gradually increased since reaching a low during 2005's fiscal year.

In the Pittsburgh region, the study found operational and total margins were slightly better than the statewide average. However it is not all good news.

"Some of the smaller hospitals are not doing as well as the larger hospitals, and in fact some of the smaller hospitals lost money [in southwest Pennsylvania]," Tuma said. "That's a trend that we tend to see."

Tuma adds that increased income for the hospital does not necessarily mean that the hospitals are raising their prices. He attributes the increase to a number of factors including a recovering economy and better hospital management.