Hospitals see drop in uncompensated care – Pittsburgh Post-Gazette


Pennsylvania hospitals’ uncompensated care — the combination of charity care expenses and uncollectable debt for care that the hospitals provide — dropped 13.3 percent statewide and 8.21 percent regionally last year, with the now-targeted Medicaid expansion cited as a big reason why.



“Certainly Pennsylvania Medicaid expansion programs have played a significant role in this decrease in uncompensated care,” said Joe Martin, executive director of the Harrisburg-based Pennsylvania Health Care Cost Containment Council, (HC4) which released its annual analysis of hospitals’ finances Wednesday.



In whole dollars, the 168 general acute care hospitals reported that their uncompensated care went from $975 million in fiscal 2015 to $846 million last year, giving the institutions an additional $129 million to reinvest in their facilities, replace equipment and cover other expenses.





The hospitals also saw a jump in average operating margin — from 5.44 percent to 5.94 percent — as well as a 4.4 percent jump in patient revenue in fiscal 2016 to $42 billion, despite experiencing a drop in patient days for the ninth straight year.



While the dropping levels of uncompensated care are encouraging, A.J. Harper, president of the Healthcare Council of Western Pennsylvania, said the region’s small and rural hospitals are still struggling financially.



A year-end council survey of its members found the 24 hospitals with fewer than 100 beds saw a 30 percent decline in operating margins, falling to an average of negative 3.899 percent from 2.99 percent the previous year, and 19 of those 24 finished with negative margins.



“While (the) Healthcare Council supports statewide Medicaid expansion, we also continue to be concerned about operating margins for hospitals throughout the region, especially the small and rural hospitals,” he said.



Among those reporting negative operating margins in the HC4 analysis were the recently purchased Ellwood City Hospital in Lawrence County, with a negative 16.02 percent operating margin;  the for-profit Sharon Regional Hospital in Mercer County (negative 12.08 percent); and Highlands Hospital in Fayette County (negative 9.54 percent).



In the Pittsburgh area, Ohio Valley General Hospital in Kennedy Township recorded a negative 9.29 percent operating margin.



Among those with the best operating margins, where revenue exceeded operating expenses, were Butler Memorial Hospital in Butler County (14.97 percent), West Penn Hospital in Bloomfield (14.19 percent), Allegheny General Hospital on the North Side (10.36 percent) and Magee-Womens Hospital in Oakland (10.24 percent).



The full report can be viewed here.



The expansion of Medicaid, a joint federal and state program that provides health coverage for low-income families and individuals, has often been cited as one of the more successful initiatives of the 2010 Patient Protection and Affordable Care Act, commonly referred to as Obamacare.



According to the California-based Kaiser Family Foundation, 11.2 million adults, including more than 700,000 Pennsylvanians, became newly eligible for Medicaid because of the program’s expanded eligibility criteria.



Proposals to replace Obamacare would fundamentally change Medicaid from guaranteeing coverage based on an individual’s income to states receiving a set amount block grant from the federal government. While stabilizing federal Medicaid costs, critics fear those plans could cut out many families from the program if funding falls short.



Steve Twedt: stwedt@post-gazette.com or 412-263-1963.

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