Pennsylvania Health Care Cost report finds operating margins at hospitals decreasing

The average statewide operating margins at general acute care hospitals fell from 5.15 percent during fiscal year 2017 to 4.76 percent during fiscal year 2018, according to a financial analysis conducted by the Pennsylvania Health Care Cost Containment Council.

Operating margins at all types of hospitals in the state dropped from 6.67 percent to 6.62 percent, despite a 3.9 percent increase in revenue.

Operating margin is defined as operating revenue minus operating expenses.

“If hospitals do not receive adequate state and federal support for Medicaid, Medicare, and programs that bolster access to care for the uninsured, their ability to provide critical care and other services for our communities will be undermined,” Andy Carter, president and CEO of The Hospital and Healthsystem Association of Pennsylvania, said. “Despite the clear case being made by this report, we are now even more concerned that some in the General Assembly want to cut funding for uncompensated care in the Tobacco Settlement Fund.”

Safety nets for high-need patients, public health programs, and research grants are in jeopardy in Pennsylvania. A debt payment of $115 million is due.

The 2017–2018 state budget provides for the one-time monetization of funds received through the Master Tobacco Settlement Agreement, which could generate $1.5 billion for the state budget.