Financial Analysis 2012 - Volume One - News Release

Contact: Paul Hambke, Press Secretary
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Harrisburg, PA - May 15, 2013 - The statewide total margin realized by the 171 General Acute Care (GAC) hospitals in Pennsylvania decreased by 1.22 percentage points, from 7.04% to 5.82%, during the fiscal year that ended June 30, 2012 (FY12), according to a report released today by the Pennsylvania Health Care Cost Containment Council (PHC4). The report also shows the value of uncompensated care—either uncollectible debt or charity care—provided by hospitals in the commonwealth grew by 6.4% in FY12, or about $62 million, to a total of $1.04 billion.

“While a number of hospitals, particularly larger facilities, experienced relatively healthy margins in Fiscal Year 2012, there are trouble spots among many of the small to mid-size hospitals in PA. In addition, the continued growth of uncompensated care, now over $1 billion annually, remains a major concern,” said Joe Martin, executive director of PHC4.

This year, uncompensated care—care hospitals provide for which they are not paid, either due to uncollectible debts or charity cases—topped $1 billion, a growth of 121% between Fiscal Year 2002 (FY02) and FY12. Uncompensated care has risen from $469 million in FY02 to $1.04 billion in FY12. During the same period, total operating revenues statewide have increased 84%.

For FY12, overall net income fell by $391 million, from $2.69 billion in FY11 to $2.30 billion in FY12. The decrease in net income resulted from a $517 million decline in non-operating income and $126 million increase in operating income. Operating income comprises patient care and a variety of related functions such as medical education, cafeteria services, parking and community health services. Non-operating income often includes such things as investment gains, trusts or endowments and contributions.

Report highlights

The Volume One financial analysis of GAC hospitals is the first of three PHC4 publishes annually. Volume Two on Ambulatory Surgery Centers and Volume Three on non-GAC hospitals will be released later this year.

PHC4 is an independent state agency charged with collecting, analyzing and reporting information about the cost and quality of health care in Pennsylvania. Copies of Financial Analysis 2012, Volume One are free and available at PHC4’s website at