hospital finances

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Rich Hospitals Report Hefty Profits While Others Post Losses

Profits soared at some hospitals in Massachusetts last year but the number of hospitals posting losses also grew, according to a new report from the Patrick administration.

WBUR’s Martha Bebinger reports:

Boston’s highly paid hospitals, including Children’s, Massachusetts General, Brigham and Women’s and Beth Israel Deaconess, each made tens or hundreds of millions of dollars.  Boston’s two largest safety net hospitals lost money, however: $26 million at Boston Medical Center and $7 million at Cambridge Health Alliance.

Across the state, the picture is mixed, with some community and safety net hospitals increasing profits 8-11% and others losing money by nearly the same margins.  The report concludes that overall, hospital finances improved from the prior year. The Massachusetts Hospital Association says that’s a distorted view of hospital finances because it doesn’t reflect increasing liabilities such as debt and aging facilities. The association says the report shows low government payments mean fewer hospitals can break even.

Massachusetts Hospital Association Vice President Tim Gens says a growing number of hospitals in Massachusetts reported losses last year.  Gens says a key reason is government payments for low income or elderly patients that don’t cover costs.

“The federal government underpays by so much that it really contributes to the drama that many hospitals are experiencing,” he said.

A snapshot of acute care hospital financial performance in fiscal year 2010

Help On The Way For Safety Net Hospitals, BMC and CHA

The federal government rides in with a $435 million aid package for Massachusetts hospitals that treat predominantly poor patients, with the largest chunk going to Boston Medical Center, The Boston Globe reports.

The plan, negotiated with Governor Deval Patrick’s administration over the past seven months, includes $180 million for BMC and gives Cambridge Health Alliance, which runs the state’s only public hospital, an extra $163 million in federal Medicaid funding over two years.

The money, except for the Cambridge Health Alliance portion, must clear a remaining hurdle before it is transferred into the hospitals’ coffers. The federal government will provide $335 million, but Massachusetts must come up with about $100 million. The state Legislature must authorize the use of the state funds, language that has been held up as part of Republican objections to a larger spending bill.