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Admissions Up 2.7% at Western Pennsylvania Hospitals
WARRENDALE, Pa. -- Hospitals in western Pennsylvania experienced an increase in average net operating margins for hospitals for fiscal year 2004, but at the same time, more than a third of the reporting hospitals reported negative operating margins, according to the year-end financial report from the Hospital Council of Western Pennsylvania.The report, called the Flash Survey, tracks financial indicators for 56 hospitals. The Released quarterly to hospitals in the region, the survey covers such financial indicators as operating margins, inpatient and outpatient admissions, average length of stay, occupancy rate, emergency room outpatient visits, and adjusted cost per case."While this report shows an increase in operating margins, hospitals in our region are still struggling financially," said Ian Rawson, president of Hospital Council. "Despite the increase in operating margins, these increases are not sufficient enough to meet the capital needs of hospitals. We know that the average age of hospital plants in our region is several years higher than the U.S. average. We also see from this report that seven hospitals had negative margins in excess of 5%."For fiscal year 2004, western Pennsylvania hospitals showed a positive average net operating margin gain of 1.74%, up 2.01 percentage points from last year's 0.27% loss. The median net operating margin percentage was a gain of 0.65% as compared to a loss of 0.14% last year. At the same time, 20 of the 56 reporting hospitals reported a loss in net operating margin."Although we do see an increase in operating and revenue margins, our region's hospitals still lag behind hospitals across the country when it comes to financial trends," said Walter K. Wayne, chief financial officer for the Council. "For example, while western Pennsylvania's hospitals experienced a gain in net operating margin of 1.74%, nationally the gain in 2003 for U.S. hospitals in aggregate net operating margins was 3.3%. In addition, our total revenue margin was 3. 95%. This compares to a gain of 4.8% for hospitals nationally in 2003."At the same time, this survey shows a significant increase in some trends such as uncompensated care and hospital expenses. For fiscal year 2004, 56 hospitals provided $258 million of uncompensated care compared to fiscal year 2003, in which 57 hospitals provided $210 million of uncompensated care. "Of the reporting hospitals, 25 of those provided uncompensated care greater than 5% of net patient revenue," Wayne said.In addition, hospital expenses continue to climb. For fiscal year 2004, total hospital expense increased 6.1%, primarily due to increases of 3.6% in salaries, 15.9% in benefits and 8.2% in non-salary operating costs."From these trends we can see that hospitals in our region still face increasing expenses related to their missions of providing care for everyone who needs it in their communities, while also working to recruit and retain their employees," Rawson said. "We can see from these trends that even with the slight increases in operating and revenue margins, hospitals still face growing expenses in other areas."Other trends reported for fiscal year 2004 include:An increase in admissions of 2.7%An increase in patient days of 1.7%A slight increase in occupancy rate from 64.7% to 65.8%A slight increase in full time equivalents of 0.3%An increase in outpatient registrations of 1.8%An increase of surgical operations of 2.6% for inpatient and 1.8% for outpatientHospital Council of Western Pennsylvania is a regional membership association which provides support to health care providers throughout the region. Visit Hospital Council of Western Pennsylvania: www.hcwp.org"