Majority of general acute care hospitals experienced financial losses in 2023

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The majority of Pennsylvania’s general acute care hospitals operated at a loss during fiscal year (FY) 2023, according to recent financial analysis by the Pennsylvania Health Care Cost Containment Council.

A total of 51 percent operated at a loss, a 31 percent increase from the previous fiscal year.

In addition, a third of general acute care hospitals operated on the minimum margin needed to be sustainable in the long term.

Statewide, the average operating margin was 2.26 percent, half of what it was in 2022.

“This data underscores that Pennsylvanians’ access to health care is under significant threat as payments fail to keep up with the skyrocketing cost of providing care,” said Nicole Stallings, Hospital and Healthsystem Association of Pennsylvania president and CEO. “Hospitals cannot continue to care for and serve the needs of their communities in the long term without stable financial footing.”

Other findings in the council’s report:

Three-year total margins include operating margins as well as other factors. The number of hospitals operating with negative three-year total margins increased to 33 percent for fiscal years 2021–2023.

The minimum to be financially sustainable in the long-term is 4 percent. A total of 15 percent of general acute care hospitals posted margins lower than 4 percent.