Report: Most state hospitals profitable


BOSTON -- The overall profitability of Massachusetts hospitals improved last year, but 11 of the 64 still lost money, according to a new state report.

Neither of Berkshire County’s three hospitals, Berkshire Med-
ical Center in Pittsfield, Fairview Hospital in Great Barrington, and the former North Adams Regional Hos-
pital, made the list of unprofitable hospitals. Saddled with debt, NARH closed abruptly on March 28.

The 2013 fiscal year report released by the Center for Health Information and Analysis said the total margin of Massachusetts hospitals -- the percentage of revenues exceeding expenses -- climbed to 4.1 percent in the period ending Sept. 30, from 3.8 percent a year earlier.

The margin increased to 4.6 percent from 3.6 percent at the state’s six academic medical centers.

But at 23 hospitals that serve a disproportionate number of Medicaid and Medicare pat-
ients, the margin fell to 3.6 percent from 5.6 percent.

"It’s clear this was a good year for hospitals, but there was a lot of variation," Aron Boros, the center’s executive director, told The Boston Globe. "When you look at the hospitals that have negative margins, they are the hospitals that have had strains over the years."

The total margins for BMC, Fairview and NARH were 8.8 percent, 10.1 percent, and 4.1 percent, respectively. BMC is listed as a teaching hospital, while Fairview and NARH are ranked as community hospitals.

The state’s most profitable hospital was Boston Children’s Hospital, which earned $157.7 million.

The largest loss, $20.3 million, was posted by North Shore Medical Center in Salem.

Five profitable hospitals registered non-operating gains, from investments and other activities that offset operating losses.

The report understates the financial pressures on hospitals, said Tim Gens, executive vice president of the Massachusetts Hospital Association, citing government reimbursement cuts, a decrease in inpatient volume, and a push to reduce medical expenses.

At NARH, the average payment period -- the amount of time that it takes hospitals to pay current liablities -- was 62 days in fiscal 2013, slightly over the statewide median of 53 days for the 22 community hospitals listed.

NARH’s ratio of cash flow to long term debt was 11.9 percent, far below the statewide median of 20.0 percent for the state’s community hospitals in fiscal 2013. The lower the ratio the more likely a hospital may find it difficult to meet current and long term financing needs, according to the report.

In contrast, Fairview’s ratio was 47.7 percent, and BMC’s 28.6 percent.

"What the margins don’t tell you is the age of the facilities, their debt service, their access to capital, their cash on hand -- all these are examples of the measures you have to pay attention to if you manage hospitals," he said.


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