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HAP Says Key Hospital Report Underscores Need for Access to Affordable Health Care in Pennsylvania

April 26, 2017

The Pennsylvania Health Care Cost Containment Council (PHC4) today made public its financial analysis report for fiscal year (FY) 2016.

The analysis shows that hospital operating margins have, in aggregate, increased from 5.44 percent to 5.94 percent. But this data does not tell the full story about the health of Pennsylvania hospitals. A closer look into the figures reveals that 51 general acute care hospitals (30%) posted a negative operating margin during FY 2016, and a majority of them are operating in the red for the third consecutive year.

Further, the report found that uncompensated care (a combination of charity care and bad debt) decreased from $975.2 million during FY 2015, to $845.7 million during FY 2016. This represents a $129.6 million (13.3%) decrease.

Andy Carter, President and CEO of The Hospital and Healthsystem Association of Pennsylvania (HAP), released the following statement about the report:

“The PHC4 report highlights the complexities of Pennsylvania’s health care landscape. Pennsylvania’s hospitals serve diverse communities with diverse needs. Many different factors affect hospitals’ financial performance.

“The reduction in uncompensated care values is a key bright spot in the PHC4 analysis and underscores the importance of access to health care. Thanks to the Affordable Care Act, 1.1 million more Pennsylvanians have benefited from health insurance through Medicaid expansion and the health insurance marketplace and have less reliance on charity care.

“We do not, however, take for granted these reductions in uncompensated care. Despite coverage gains, too many hospitals continue to struggle. State and federal proposals that would reduce Medicaid funding for Pennsylvania hospitals would further threaten their sustainability. “These smaller, community-based hospitals often are located in rural areas, and are on the front lines of treating older and sicker patients and dealing with Pennsylvania’s opioid epidemic. Financial stability is paramount for these community anchors, as many transform their facilities to provide outpatient and preventive care services. This proactive approach to care helps patients maintain better health and avoid costly emergency room visits and lengthy hospital stays.

“As negotiations about the potential repeal and replacement of the Affordable Care Act continue, we urge Congress to proceed with caution. If the Affordable Care Act is repealed without preserving affordable coverage options for Pennsylvania’s families, the results could be devastating for patients and providers, alike.”

HAP is closely monitoring Congressional efforts to repeal and replace or repair the Affordable Care Act and will continue to advocate for the preservation of access to adequate and affordable care for all Pennsylvanians.

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