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Rehab hospitals’ margins rise

Operating margins rose in Pennsylvania’s rehabilitation and psychiatric hospitals during fiscal 2009, according to a report released Tuesday by the Pennsylvania Health Care Cost Containment Council.

The council said that the operating margin — a measure of profitability based on patient revenue — for the state’s 20 rehabilitation hospitals went up by 1.33 percentage points to 10.23 percent. It grew by 0.23 of a percentage point to 6.19 percent for psychiatric hospitals. Long-term acute care (LTAC) hospitals also saw an improvement as the operating margin rose from 2.31 percent in fiscal 2008 to 3.46 percent in fiscal 2009.

The total margin, which includes investment income, declined for both rehabilitation and psychiatric hospitals.

Tuesday’s report on specialized hospitals is the third in a series the council has done on the financial status of hospitals in the state. General acute care hospitals, which provide most patient care, had total margins of 2.08 percent in fiscal 2009 compared with 5.7 percent for rehabilitation hospitals, 2.59 percent for psychiatric hospitals, 2.4 percent for LTAC hospitals and 26.26 percent for outpatient surgery centers.

The amount of uncompensated care — care for which there is no payment — was highest in general hospitals: 2.43 percent. It was less than 1 percent in rehabilitation hospitals and outpatient surgery centers. Uncompensated care accounted for 1.87 percent of net patient revenue at psychiatric hospitals.

More than half of revenue at rehabilitation hospitals came from Medicare. On average, it paid $1,100 per day compared with $1,179 for private managed care plans and $926 for Medical Assistance managed care.

Nearly 60 percent of net patient revenue at psychiatric hospitals came from Medical Assistance, the insurance program for the poor that is also known as Medicaid. On average, Medical Assistance managed care plans paid $484 per day, compared with $700 for Medicare and $642 for commercial managed care plans.


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