PHC4 | Financial Analysis 2014 | Volume One

Financial Analysis 2014 - Volume One - News Release

Contact: Joe Martin
717-232-6787 or

PHC4 RELEASES NEW HOSPITAL FINANCIAL INFORMATION

Harrisburg, PA - May 21, 2015 - The statewide total margin realized by the General Acute Care (GAC) hospitals in Pennsylvania decreased by 0.36 percentage points, from 6.06% to 5.70%, during the fiscal year that ended June 30, 2014 (FY14), according to a report released today by the Pennsylvania Health Care Cost Containment Council (PHC4). Statewide operating income decreased from $1.8 billion in FY13 to $1.7 billion in FY14. Statewide average operating margins decreased from 4.67% in FY13 to 4.30% in FY14.

"While the data shows many Pennsylvania hospitals experienced relatively healthy margins in fiscal year 2014, 34% lost money on operations and 28% lost money overall," said Joe Martin, executive director of PHC4.

The report also shows the value of uncompensated care—either uncollectible debt or charity care—provided by hospitals in the commonwealth grew by 2.2% in FY14, or about $22 million, to a total of $1.07 billion. Uncompensated care, care hospitals provide for which they are not paid, either due to uncollectible debts or charity care, has risen from $461 million in FY01 to $1.07 billion in FY14.

"The continued growth of uncompensated care remains a major concern for Pennsylvania hospitals," noted Mr. Martin.

Report highlights:

Statewide operating income decreased because the increase in operating expenses outpaced the increase in operating revenues. Pennsylvania hospitals collectively posted an increase in operating revenue of 3.1%, or $1.2 billion, while operating expenses increased 3.5%, or $1.3 billion. Total operating revenue increased to $40.5 billion, and operating expenses increased to $38.7 billion in FY14.
There was a general improvement in the number of hospitals with a positive three-year average total margin in FY14. Eighty percent, or 131, hospitals experienced a positive three-year average total margin in FY14.
Uncompensated care as a percent of net patient revenue remained relatively unchanged at 2.78%.
On a statewide basis, the amount of time the average bill remained in accounts receivable decreased 1 day to 45 days in FY14.
The number of statewide hospital discharges reported by Pennsylvania hospitals declined from 1.65 million in FY13 to 1.60 million in FY14.
The statewide total number of patient days declined for the seventh consecutive year at Pennsylvania hospitals, from 8.62 million in FY13 to 8.35 million in FY14.
Of the $38.3 billion in statewide net patient revenue 54.7%, or $20.9 billion, was derived from inpatient care. Statewide inpatient revenue increased 1.8% during FY14.
Statewide outpatient revenue increased 4.9% during FY14, rising to $17.1 billion. Outpatient revenue made up 44.8% of total net patient revenue in FY14. Hospitals reported a 3.2% decrease in the number of outpatient visits in FY14 to 38.0 million visits.

The Volume One financial analysis of GAC hospitals is the first of three PHC4 publishes annually. Volume Two on Ambulatory Surgery Centers and Volume Three on non-GAC hospitals will be released later this year.

PHC4 is an independent state agency charged with collecting, analyzing and reporting information about the cost and quality of health care in Pennsylvania. Copies of Financial Analysis 2014, Volume One are free and available at PHC4's website at http://www.phc4.org.