Western Pennsylvania Hospitals Show Low Operating Margins

Apr 03, 2001, 01:00 ET from Hospital Council of Western Pennsylvania

    WARRENDALE, Pa., April 3 /PRNewswire/ -- Western Pennsylvania hospitals
 continue to show low operating margins and occupancy rates with slight
 improvements in both statistics, according to a recently report released by
 The Hospital Council of Western Pennsylvania.
     "The report comes on the heels of the Senate passage of bills on the use
 of Pennsylvania's portion of the tobacco settlement," said Walter Wayne,
 senior vice president of finance for Hospital Council.  "Although this report
 shows some slight improvement for our region's hospitals, hospitals need the
 additional relief which will come from the Tobacco Settlement, especially in
 the area of uncompensated care."
     Hospital Council's Flash Survey Report, which depicts trend data for
 western Pennsylvania hospitals reflects data for 63 regional hospitals for the
 first six months of fiscal year 2000-2001. Hospital Council has been
 collecting financial data since 1984.
     "Although we have seen a slight improvement in the operating margin for
 the region's hospitals, we are still only showing an operating barely over the
 break-even point," said Walter Wayne, senior vice president of Finance for
 Hospital Council. The report indicates that 33 western Pennsylvania hospitals
 reported a gain while 30 hospitals reported a loss in net operating margin.
     The region's hospitals are reporting an average of 0.17 percent net
 operating margin gain for the first six months of fiscal year 2001, up
 1.14 percentage points from a level of 0.97 percent less of fiscal year 2000.
     "One of the major trends we see from this report is a large increase in
 total hospital expenses.  These expenses are related to capital costs," Wayne
 said.  "The jump in total hospital expenses of 3.2 percent is the highest in
 the past eight years.  Capital-related costs were a bit contributor to the
 increase in hospital expenses."
     Occupancy rates, another major financial indicator, indicate a slight
 increase in the report.  "The average occupancy rate for western Pennsylvania
 hospitals was 60 percent, up one percentage point from lat year," Wayne said.
 "The slight increase in occupancy rate can be attributed to the 3.7 percent
 decline in set up and staffed beds."
 
     Other indicators from the Flash Survey are:
 
     --  Hospitals reported a 0.6 percent increase in inpatient hospital
         admissions.
 
     --  The average length of stay remained the same as last year at 4.7 days
 
     --  Outpatient visits increased at 3.5 percent, the same increase as last
         year.
 
     --  63 hospitals provided $125 million in uncompensated care, compared to
         67 hospitals providing $127 million in compensated care last year.
 
     "The data indicates that hospitals in our region still need additional
 relief from financial pressures," Wayne said.  Besides facing financial cuts
 from the Balanced Budget Act, hospitals are facing low reimbursements from the
 state in payments for Medical Assistance as well as ongoing provision of
 uncompensated care for patients who are either uninsured or underinsured.
 
 

SOURCE Hospital Council of Western Pennsylvania
    WARRENDALE, Pa., April 3 /PRNewswire/ -- Western Pennsylvania hospitals
 continue to show low operating margins and occupancy rates with slight
 improvements in both statistics, according to a recently report released by
 The Hospital Council of Western Pennsylvania.
     "The report comes on the heels of the Senate passage of bills on the use
 of Pennsylvania's portion of the tobacco settlement," said Walter Wayne,
 senior vice president of finance for Hospital Council.  "Although this report
 shows some slight improvement for our region's hospitals, hospitals need the
 additional relief which will come from the Tobacco Settlement, especially in
 the area of uncompensated care."
     Hospital Council's Flash Survey Report, which depicts trend data for
 western Pennsylvania hospitals reflects data for 63 regional hospitals for the
 first six months of fiscal year 2000-2001. Hospital Council has been
 collecting financial data since 1984.
     "Although we have seen a slight improvement in the operating margin for
 the region's hospitals, we are still only showing an operating barely over the
 break-even point," said Walter Wayne, senior vice president of Finance for
 Hospital Council. The report indicates that 33 western Pennsylvania hospitals
 reported a gain while 30 hospitals reported a loss in net operating margin.
     The region's hospitals are reporting an average of 0.17 percent net
 operating margin gain for the first six months of fiscal year 2001, up
 1.14 percentage points from a level of 0.97 percent less of fiscal year 2000.
     "One of the major trends we see from this report is a large increase in
 total hospital expenses.  These expenses are related to capital costs," Wayne
 said.  "The jump in total hospital expenses of 3.2 percent is the highest in
 the past eight years.  Capital-related costs were a bit contributor to the
 increase in hospital expenses."
     Occupancy rates, another major financial indicator, indicate a slight
 increase in the report.  "The average occupancy rate for western Pennsylvania
 hospitals was 60 percent, up one percentage point from lat year," Wayne said.
 "The slight increase in occupancy rate can be attributed to the 3.7 percent
 decline in set up and staffed beds."
 
     Other indicators from the Flash Survey are:
 
     --  Hospitals reported a 0.6 percent increase in inpatient hospital
         admissions.
 
     --  The average length of stay remained the same as last year at 4.7 days
 
     --  Outpatient visits increased at 3.5 percent, the same increase as last
         year.
 
     --  63 hospitals provided $125 million in uncompensated care, compared to
         67 hospitals providing $127 million in compensated care last year.
 
     "The data indicates that hospitals in our region still need additional
 relief from financial pressures," Wayne said.  Besides facing financial cuts
 from the Balanced Budget Act, hospitals are facing low reimbursements from the
 state in payments for Medical Assistance as well as ongoing provision of
 uncompensated care for patients who are either uninsured or underinsured.
 
 SOURCE  Hospital Council of Western Pennsylvania