Report: Most MetroWest hospitals turned smaller profits in 2013
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Milford Regional Hospital President Edward Kelly said a report released by the Center for Health Information and Analysis provides a "quick look" at hospital performance, not a full picture.
Most MetroWest-area hospitals were profitable in fiscal 2013, but profits faltered considerably at most hospitals, year over year, according to a report issued last week by the Massachusetts Center for Health Information and Analysis (CHIA).
CHIA released the financial information in its 2013 Massachusetts Acute Hospital Financial Performance Report, the first such report by the agency, which is tasked with monitoring health care spending under the state’s 2012 health care cost containment law.
The earnings roundup
According to the report, Framingham-based MetroWest Medical Center posted a $1.3-million loss in fiscal 2013 (which ended Sept. 30 for all hospitals), making it the only area hospital (though not the only one in the state) to lose money last year. That’s compared to net income of $367,116 in fiscal 2012.
Milford Regional Medical Center posted the largest profit, at $8.79 million. But that’s about half of what it earned in fiscal 2012, when profits totaled $17.17 million. Hospital officials attribute the stark decline mostly to the sale of its home health and hospice business in 2012.
In 2013, Concord’s Emerson Hospital, a Partners Health Care affiliate, earned $1.13 million, down from $4.47 million in fiscal 2012. And, at $2.42 million, Marlborough Hospital, part of Worcester-based UMass Memorial Health Care, more than doubled its profit over 2012, when it earned $1.01 million, mostly due to investment income gains, according to Ellen Carlucci, vice president of development at Marlborough Hospital.
While in the black, hospital execs take sober view
Phone calls to Tenet Health Care, the Texas company that owns MetroWest Medical Center, and to the hospital itself, were not returned by deadline.
Meanwhile, officials at the hospital’s profitable MetroWest counterparts were far from celebratory when news broke last week that they were profitable, despite the cost pressures many of them have cited in recent months and years, sometimes as an explanation for budget-cutting measures such as layoffs and downsizing of services.
These pressures are linked to health care reform at the state and federal levels, which has reduced reimbursements from private and public payers, and required hospitals to cap their spending. At the same time, hospitals across the state are seeing admissions volumes drop because of new federal regulations that require a higher standard for admission.
Carlucci said Marlborough Hospital may have posted a profit in 2013, but since it was fed largely by investment income, the hospital can’t count on it each year. And fiscal 2014, which began Oct. 1, has brought with it an operating loss so far, prompting the hospital to conduct a round of layoffs in January. The administration continues to keep a close eye on the bottom line, Carlucci said.
“We are looking very closely at our expenses, and how do we manage our expenses, how do we manage growth?” Carlucci said.
Milford Regional Medical Center’s profitable performance in fiscal 2013 doesn’t provide a full picture, according to Edward Kelly, its president. He said one of the CHIA report’s shortcomings is that it doesn’t include all of Milford Regional’s financial information, just financial performance of the hospitals alone. Kelly said that when the budget of hospital physician groups is factored in, Milford Regional’s profit totaled a more modest $2.7 million, with an operating margin of 1.3 percent. Kelly said he’d like that number to be a little closer to 2 percent, which is about what Milford Regional has averaged annually over the last 20 years.
It’s also the average margin for Bay State community hospitals, according to the CHIA report, and it marks a decline of 1.8 percent from 2012.
“To me, it’s kind of a quick look,” Kelly said of the CHIA report. “But what really matters are the consolidated financial statements.”
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