PHC4 Financial Report

Financial Report 1996 & 1995 Fiscal Years

Harrisburg, PA - July 16, 1997 - Total outpatient activity, expenses, revenues, and net margins for Pennsylvania hospitals all increased in 1996 while overall inpatient activity declined, according to a new report released today by the Pennsylvania Health Care Cost Containment Council.

The Financial Report for Pennsylvania Hospitals, Ambulatory Surgical Centers and Health Maintenance Organizations also reports that HMOs paid hospitals $1.1 billion for inpatient care in 1995 and covered 25% of Pennsylvania residents and that free standing surgical facilities showed an 8.2% increase in the number of outpatient surgeries from 1995 to 1996 and a 6% increase in revenue.

"This report provides further evidence of the changing nature of today's health care delivery system," said Donald L. Zimmerman, Ph.D., the Council's new executive director. "More and more, services are being shifted from the inpatient to the outpatient setting under the umbrella of managed care."

Other highlights of the report include the following:

The number of hospitals in 1996 is down to 268 hospitals compared to 290 hospitals in 1991, the number of hospital admissions declined 2.5% and the number of patient days dropped by 5.9%. from 1995 to 1996;
Medicare and Medicaid utilization declined;
The adjusted average cost per hospital discharge decreased by 2.6% for large hospitals and .06% for small hospitals;
The gap between patient revenue and operating expenses widened to -2.1%;
General Acute hospitals provided $ 637 million in uncompensated care -- a 4.7% increase over 1995. Uncompensated care - the sum of charity care and bad debt - represented 4% of total hospital expenses;
The ten largest providers of charity care account for a disproportionate 38% of all hospital charity care in Pennsylvania.

The Financial Report relies on hospital audited financial statements as well as Medicare and Medicaid cost reports. All hospitals had the opportunity to review and correct data prior to publication.

Financial data for HMOs was provided to PHC4 by the Hospital and Healthsystem Association of Pennsylvania (HAP) and the Pennsylvania Medical Society (PMS). These data were originally submitted by the HMOs to the Departments of Health and Insurance and compiled by HAP and PMS.

Free copies of the report are available to the public and can be obtained by contacting the Pennsylvania Health Care Cost Containment Council. You can also download a copy of the full report from the Council's website at http://www.phc4.org.

Note: Donald L. Zimmerman, Ph.D. replaced Ernest J. Sessa as PHC4's Executive Director on July 1, 1997.

For release on Wednesday, July 16, 1997

For more information contact: # 717-232-6787