Acute care facilities financially sound

November 15, 2012

The financial condition of Pennsylvania’s nongeneral acute care facilities remained sound in fiscal year 2010, although the statewide average operating margin for pyschiatric hospitals and long-term acute care hospitals dropped slightly, according to the latest report from the Pennsylvania Health Care Cost Containment Council, being released today. The operating margin for the state’s rehabilitation hospitals increased more than 3.7 percent.

Operating margin is the ratio of operating income to total operating revenue and puts operating income in perspective with a facility’s volume of business.

PHC4 Executive Director Joe Martin said the various categories of hospitals in the report showed mixed financial results in 2011 compared to the previous year, but the overall profile indicates they are generally stable.

“They remain in a good position to continue providing important services to patients in Pennsylvania who rely on these facilities for particular types of medical treatment,” said Martin.

Freestanding psychiatric hospitals as a group posted a 0.67 percentage point decrease in the statewide average operating margin, from 5.9 percent in the 2010 fiscal year to 5.23 percent in the 2011 fiscal year.

The statewide average total margin increased 0.19 of a percentage point, from 4.55 in fiscal year 2010 to 4.74 in fiscal year 2011.

In comparison, the operating margin of Southwood Psychiatric Hospital in Bridgeville in fiscal year 2011 was 3.65 percent, while its total margin was 3.30 percent. The Medical Assistance program provided 75.5 percent of Southwood’s net patient revenue, compared with the 54.9 percent average of the net patient revenue that MA provided the states’s other psychiatric hospitals in 2011.

The Pennsylvania Health Care Cost Containmnet Council is an independent state agency charged with collecting, analyzing and reporting information that can be used to improve quality and restrain the cost of health care in Pennsylvania.

Karen Mansfield is an award-winning journalist and mom of five who has been a staff writer for the Observer-Reporter since 1988. She enjoys reading, the Pittsburgh Steelers, a good glass of wine and nice people.

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