Study: Ellwood hospital one of highest in state on revenue gap, Medicare use
Only two other for-profit facilities had a worse ratio,
Other area hospitals had operating margins as follows: Butler Memorial, 11.73 percent; Heritage Valley Beaver, -0.03; Heritage Valley Sewickley, -1.84;
Overall, 69 of the 168 hospitals, 39 percent, had negative operating margins in 2018, up from 62, 37 percent, the year before, the study said.
Ellwood's hospital, which was a nonprofit until its purchase in
Since taking control, Americore has reduced the workforce by about half to approximately 180 and cut some programs it deemed unprofitable or not suited to the health care needs of the region. The goal is to adjust the operations of the hospital to better suit the region's health care market, officials have said.
However, the process has been rocky at times. Workers at the medical center reported more than a dozen times since last August that they were not paid or received reduced wages on payday, leading to an investigation by the
"
Medicare share
The study also looked at how large of a portion of patient revenue hospitals were relying on to be reimbursed by Medicare and other medical assistance programs. It was not uncommon for medical facilities to list 30 to 40 percent of patient costs being covered by Medicare, but only seven centers had numbers of 60 percent or higher in fiscal year 2018.
Annarumo did dispute the Medicare and other figures included in the report, but was unable to provide other numbers.
"I have reviewed the report, and the numbers do not represent the full 2018 fiscal year for our hospital," she said in her statement. "Furthermore, I know with certainty that our patient share is not 100 percent Medicare. I have asked the team to review the numbers and provide more accurate details of the mix of our patients."
Annarumo added, "The information in the report is over a year old, and we have significantly reduced our costs while aligning our services to market needs since this time."
Gugoff said the operating margins are financial indicators and can be used to interpret a hospital's financial viability, but the council doesn't make judgments on the health of hospitals itself because its members are not forensic auditors.
Small hospitals struggling everywhere
It is not just
According to an April study by the federally funded North Carolina Rural Health Research Program at the
That percentage is 196 of the 2,129 rural hospitals included in the study. Another 17 percent, 361, were predicted at a mid-high risk and 43.9 percent, 934, in the mid to mid-low risk category.
The South is the worst region of the country for rural hospitals, with 18.7 percent projected to be at high risk of financial distress. The Northeast region, which includes
Authors of the study said the impact of these hospitals struggling is magnified because they tend to serve patients who are older, poorer and more dependent on public insurance than urban hospitals. If these facilities close or significantly cut back on services, the health of their community members could suffer, they said.
In
Senate Bill 314 passed earlier this month and has moved to the state House for consideration. The measure would form the Rural Health Redesign Center, which would aid hospitals by creating a more predictable payment plan and a fixed budget to stabilize reimbursements. The center would be utilized by health systems participating in the state's Global Payment Model for rural hospitals.
"Most of the qualifying hospitals are running in the negative, with one in three operating with margins in the red," Baker said. "These facilities are indispensable in the health care network, serving 1.8 million Pennsylvanians.
"Equally consequential, they are significant employers and economic generators as one of the top five employers in their respective communities," she added.
Once the center is up and running, support will be provided to offer new community health services and programs to help hospitals meet key needs such as behavioral health and substance abuse. It will initially be funded by a
"If so much time and energy is not devoted to keeping the doors open, or agonizing about available funds to make payroll, the focus can shift back to progressively extending, rather than painfully constructing services and operations," Baker said. "It also clears the way for a greater emphasis on community intervention services such as behavioral health, substance abuse treatment and home health care."
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