PHC4 | Financial Analysis 2010

Financial Analysis 2010 - Volume Three - News Release

Contact: Gary Tuma, Director of Communications
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PHC4 REPORT FINDS FINANCES IMPROVING AT NON-GENERAL ACUTE CARE HOSPITALS

Harrisburg, PA - November 15, 2011 - The financial health of Pennsylvania’s non-general acute care facilities improved in Fiscal Year 2010 (FY10) over the prior year, according to a report released today by the Pennsylvania Health Care Cost Containment Council (PHC4.)

The four types of hospitals included in Financial Analysis 2010, Volume Three – rehabilitation, psychiatric, long term acute care, and specialty – all experienced increases in their average statewide operating margins, and in average statewide total margins, during the fiscal year that ran from July 1, 2009 through June 30, 2010. In each case, the margins were positive.

“The hospitals featured in this report play a vital role in Pennsylvania’s overall health care system. Their current financial picture indicates that they are well positioned to continue serving the patients who rely on them for particular kinds of treatment,” said Joe Martin, executive director of PHC4.

Financial Analysis 2010, Volume Three is the final report for 2010 in PHC4’s series on the financial health of Pennsylvania’s medical facilities. Volume One, released in May 2011, contained financial data on the state’s general acute care hospitals. Volume Two, released in September, concentrated on the state’s ambulatory surgery centers.

Following are Volume Three report key findings:

The statewide average operating margin for the state’s 20 rehabilitation hospitals improved 0.14 percentage points from 10.23% in FY09 to 10.37% in FY10. The statewide average total margin improved 4.95 percentage points from 5.70% in FY09 to 10.65% in FY10.
The number of patients receiving rehab care at rehabilitation hospitals and at general acute care rehab units declined in FY10, continuing a nearly decade-long trend. This is attributable in part to 2004 changes in Medicare reimbursement regulations.
After declining in FY09, the statewide average total margin for the psychiatric hospitals rebounded by 1.84 percentage points, from 2.74% in FY09 to 4.58% in FY10. That is the highest statewide average total margin for psychiatric hospitals in 10 years.
Medical Assistance provided more than half (56.0%) of the patient revenue at Pennsylvania’s 19 psychiatric hospitals in FY10.
The statewide average operating margin for the state’s 27 long-term acute care (LTAC) hospitals increased 2.77 percentage points from 3.46% in FY09 to 6.23% in FY10. The statewide average total margin increased 2.53 percentage points from 2.40% in FY09 to 4.93% in FY10.
Although two of the five specialty hospitals in the state had negative operating margins, the statewide average rose by 0.31 of a percentage point, from 7.12% to 7.43%. One specialty hospital had a negative total margin, but as a group the average rose by 4.77 percentage points from 6.43% to 11.20%.

The Pennsylvania Health Care Cost Containment Council is an independent state agency charged with collecting, analyzing and reporting information that can be used to improve the quality and restrain the cost of health care in Pennsylvania. Copies of Financial Analysis 2010, Volume Three are free and available on the Council’s website at http://www.phc4.org.