Western Pennsylvania Hospitals Face "Great Financial Stress"

With operating margins on the decline and charity care rising quickly, hospitals in western Pennsylvania are beginning to feel "great financial stress," according to the year-end financial report from the Hospital Council of Western Pennsylvania.

HCWP, which represents acute-care hospitals and other facilities in a 30-county area, said scheduled cuts in Medicare reimbursement would further bring the area's hospitals down.

"Any additional cuts in payments to the region's hospitals due to the fiscal cliff and health reform would be detrimental," Denis Lukes, HCWP vice president of payor relations and reimbursement, said in a news release. "Our region's hospitals are already seeing declines — these additional cuts would be devastating."


The report covered financial metrics for 56 of the area's hospitals for FY 2012, which began July 1, 2011, and ended June 30, 2012. Key financial indicators from the report include the following:

•    Charity care at the region's hospitals rose 5.1 percent, totaling $474 million.

•    Overall uncompensated care, including bad debts, reached $924 million in FY 2012 — an increase of nearly 5 percent.

•    The average operating margin fell from 5 percent to 4.45 percent. Without one-time revenue boosters such as electronic health record incentive payments from the federal government, the average operating margin would have been 4.13 percent.

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