Maryland Hospitals Post "Record-Low" Margins

Low volumes coupled with nominal reimbursement increases put Maryland hospitals in a tough spot financially in the most recent fiscal year, according to a report from the Baltimore Business Journal.

A report from the state's Health Services Cost Review Commission found operating profit at Maryland's 46 nonprofit hospitals dropped 71 percent in FY 2013, which ended June 30 — from $344.2 million cumulatively to $99.8 million. The operating profit margin fell to an average of 3.39 percent

Steve Ports, deputy director of policy and operations at the HSCRC, told the Baltimore Business Journal: "I don't think we've ever seen margins this low, ever."

The HSCRC dictates Medicare rates for hospitals in the state under a special exemption waiver from CMS, and this past year, the group had to issue smaller-than-normal pay bumps to keep its waiver.

Margins across the hospital industry have mostly been stagnant or have dropped over the past year. According to Moody's Investors Service, the average operating margin for a nonprofit hospital in 2012 was 2.5 percent, down from 2.7 percent in 2011. Fitch Ratings analysts have also said margins have been in flux, especially for lower-rated organizations.

More Articles on Hospital Margins:
Fitch: 20 Statistics on Hospital Financial Margins
What Hospital CEOs Need to Know About Surgical Services: 4 Strategies for Protecting OR Revenue
The Hospital CEO's Ultimate Dashboard: What to Check Daily, Quarterly and Yearly

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