Pennsylvania hospitals lost less money on uncompensated care, a mix of charity care and unpaid debt, for the fourth year in a row as the Medicaid expansion and the Affordable Care Act subsidies allow more people to get insurance, according to a report released Tuesday by the Pennsylvania Health Care Cost Containment Council.
In fiscal 2018, hospitals in the state lost $750 million to provide care to people who can't pay, a 2 percent decrease from the previous year and $317 million less compared to fiscal 2014.
Despite the decline in losses, hospitals statewide aren't reporting more income because the cost of running facilities is increasing slightly more than the increase in revenue. It's unclear what's driving up expenses, said Joe Martin, director of PHC4. He cited rising prices for treatment, facility expansion projects and consolidation as factors that could be driving up operating costs.
"The report demonstrates that hospitals are still facing significant financial challenges," said Jeff Bechtel, the senior vice president of health economics and policy at the Hospital and Healthsystem Association of Pennsylvania.
Some hospitals are dealing with the rising costs better than others. The report showed the gap between hospitals losing money and those making a significant income continues to grow.
Medicaid, which reimburses at a lower rate than commercial insurance, also contributes to poor financial performance, Bechtel said. Hospitals with a high percentage of Medicaid and Medicare patients typically make less money than those with a high percentage of patients on commercial insurance.
In the Lehigh Valley, Easton Hospital and St. Luke's Sacred Heart both saw revenues decrease for the second year in a row, but generally area hospitals fared well in the report.
St. Luke's University Health Network merged with Sacred Heart in the middle of fiscal 2018, after the hospital reported a loss for the first time in recent history. St. Luke's invested $30 million in improvements and performance has improved, said Sam Kennedy, a spokesman for St. Luke's. About a quarter of the patient revenue at Sacred Heart comes from Medicaid, compared to 14 percent statewide and 4 percent at St. Luke's Bethlehem, according to the report.
Easton Hospital had patient revenues of $163 million in 2017, but dropped to $149 million in 2018.
Similarly, some of Lehigh Valley Health Network hospitals in rural counties, such as Monroe and Schuylkill saw revenue declines. The network has said its rural hospitals are seeing less patients, and an increase in patients who are on Medicare and Medicaid.
Across the region, uncompensated care makes up anywhere from less than 1 percent of the hospital's patient revenue, such as Lehigh Valley-Muhlenberg and St. Luke's in Fountain Hill, to as high 4 percent at Lehigh Valley-Pocono.
Here's how much some regional hospitals lost on uncompensated care in fiscal 2018:
Lehigh Valley-Cedar Crest and 17th Street hospitals
Patient revenue: $1.5 billion
Uncompensated care: $11.7 million
St. Luke's-Fountain Hill
Patient revenue: $805 million
Uncompensated care: $7.3 million
Patient revenue: $149 million
Uncompensated care: $1.8 million
Coordinated Health Surgical Specialty
Patient Revenue: $126 million
Uncompensated care: $1.4 million
St. Luke's-Sacred Heart:
Patient revenue: $86 million
Uncompensated care: $1 million
Patient revenue: $254 million
Uncompensated care: $2.1 million
Patient revenue: $234 million
Uncompensated care: $9.4 million
Patient revenue: $107 million
Uncompensated care: $759,700
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