PHOENIXVILLE PA – Phoenixville Hospital, owned by Tennessee-based Community Health Systems (CHS), enjoyed a profitable year during 2010, according to a new state report, although its earnings were not in the same league as Pottstown Memorial Medical Center, its CHS companion facility 16 miles to the west.
Phoenixville’s 2010 operating margin – the money it earned from reimbursements for patient care and related operations – was 9.54 percent, ranking it fourth among 23 regional hospitals for that measure of profitability. Its 2010 total margin, which accounts for both operating and non-operating income (such as earnings on investments), was 5.54 percent, earning it seventh place.
Last year Phoenixville collected $163 million in net patient revenues, and spent $149 million, for a profit of $14 million, the Harrisburg PA-based Pennsylvania Health Care Cost Containment Council reported Friday (May 6, 2011).
The council is an independent state agency charged with addressing the cost and quality of health care in Pennsylvania. Copies of Volume One of its 2010 Financial Analysis, from which figures cited here are taken, are available free for download from the council website, here.
The three-year average total margin at Phoenixville was listed at 6.21 percent, also good for seventh place. The report shows Phoenixville made $10 million in 2007, $15 million in 2008, and $17 million in 2009. In the regional group, which covers Bucks, Chester, Delaware, and Montgomery counties, six of the 23 hospitals were reported to have lost money and operated in the red.
Only a short distance up the road (in this case, U.S. Route 422 West) Pottstown Memorial Medical Center‘s operating margin during fiscal year 2010 hit 18.08 percent, the highest among 23 general acute care hospitals operating in the Philadelphia suburbs, the report said.
In addition, PMMC’s total margin for the same period ranked fourth – at 10.63 percent – within the same group.
During 2010 PMMC collected $188 million in net patient revenues, according to the report, and incurred $154 million in total operating expenses, resulting in a fiscal year profit of $34 million.
PMMC’s high profitability last year compares to an average 2010 operating margin of 4.36 percent among all general acute care hospitals statewide, and an average 2010 total margin of 5.26 percent statewide. Effectively, PMMC performed two- to four-times more profitably than other hospitals identified in Region 8 of the council’s report.
Moreover, PMMC’s profitability has been constant or climbing in each of the preceding three years as well. Council statistics indicate the hospital earned $19 million in 2007 ($153 million in revenue; $134 million in expenses); $20 million in 2008 ($161 million revenue, $141 million expenses); and $34 million in 2009 ($173 million revenue, $139 million expenses). Its three-year average total margin for 2008-2010 was 10.63 percent, the council said, second only to Paoli Hospital on the Main Line for the same period.
CHS last Monday (May 2) raised its public bid to buy Tenet Healthcare Corp. to $7.25 per share, or about $4.06 billion.
“Overall, the financial health of Pennsylvania hospitals improved primarily because of gains in the economy and the stock market,” council Executive Director Joe Martin said. “However, the cost to hospitals for providing uncompensated care continues to increase.”
Both Pottstown and Phoenixville had dramatically lower levels of uncompensated care – the amount of hospital services rendered for which no payment was made – last year than their regional counterparts, according to the report. The region’s average in the category was 2.05 percent. The highest level of 2010 uncompensated care occurred at St. Luke’s Hospital in Quakertown PA, at 4.15 percent. At the CHS-owned hospitals, by comparison, uncompensated care hit just 1.47 percent in Pottstown, and an even lower 1.18 percent in Phoenixville.
- Read a story about the study’s overall results, written by reporter John George, titled “27 Phila.-area hospitals notch 2010 profits,” and published Friday by the Philadelphia Business Journal, here.