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Mass. Hospitals Are In Good Financial Shape. Or Are They?

Source: CHIA, "Massachusetts Acute Hospital Financial Performance, FY 2012"

Source: CHIA, “Massachusetts Acute Hospital Financial Performance, FY 2012″

Hospital profits in Massachusetts almost doubled last year, from 2.1% in Fiscal Year 2011 to 3.8% in Fiscal Year 2012.

That’s the main point of the latest report from CHIA, the state’s new Center for Health Information and Analysis.

Teaching hospitals had the highest profit margin among all acute care hospitals; the median was 4.8%.

Massachusetts Eye and Ear Infirmary is at the top of the “total margin” chart. Twelve hospitals, including many smaller community hospitals — seven owned by Steward Health Care — posted a loss.

CHIA’s Steve McCabe says hospitals, in general, are in good shape, because “when we look at the margins on a total basis and we compare that for the last five years, this represents the highest level of those five years.”

But the good times may not last. About half the profit increase, overall, came from a Medicare payment increase specific to Massachusetts that Congress is expected to eliminate. Maybe you’ve heard of the “rural floor funding,” also known as the Bay State boondoggle?

The Massachusetts Hospital Association takes issue with parts of the state’s report. To wit: Continue reading