For the first time, PHC4 has released a public report shedding light on the finances of rural hospitals in Pennsylvania.
PHC4’s Special Report on the Financial Health of Pennsylvania Rural Hospitals, Fiscal Year 2023, displays data for general acute care hospitals (GAC hospitals) located in rural counties, as defined by the Center for Rural Pennsylvania. Those hospitals fitting this definition within PHC4’s Financial Analysis 2023 Volume One report are included in this new resource.
The analysis shows that during Fiscal Year 2023 (FY23), there were 64 (41%) GAC hospitals located in a rural county. Of these GAC hospitals, 31 (48%) operated at a loss based on operating margins during FY23 and 28 (44%) operated at a loss based on total margins during FY23. The average net patient revenue for these hospitals operating at a loss was $107 million in FY23.
Barry D. Buckingham, PHC4’s Executive Director, suggests that the financial challenges of rural hospitals may have significant implications for health care access in rural areas. Buckingham states, “As rural hospitals close or reduce services due to financial pressures, residents of these areas may face longer travel times to access care, reduced availability of emergency services, and a potential general decline in the quality of health or health care services.” Rural hospitals often operate in geographically isolated areas, serving smaller populations with higher percentages of elderly and low-income individuals. Other contributing factors to the data displayed may include:
- Decreased Reimbursements: Lower payments from government programs like Medicare and Medicaid, as well as private insurers, have put a strain on rural hospitals’ finances.
- Aging Populations: Many rural areas have an aging population, which often requires more complex and expensive care.
- Hospital Volume: Rural hospitals often serve smaller populations, which can make it difficult to generate enough revenue to cover costs.
- Higher Operating Costs: Rural hospitals may face higher operating costs due to factors such as transportation, staff shortages, and the need to maintain specialized services.
- Economic Challenges: Rural communities often face economic challenges, which can impact the ability of residents to pay for health care.
For more information, visit phc4.org. To review the full report and interactive data visualizations click here.
PHC4 is an independent council formed under Pennsylvania statute (Act 89 of 1986, as amended by Act 15 of 2020) in order to address rapidly growing health care costs. PHC4 continues to produce comparative information about the most efficient and effective health care to individual consumers and group purchasers of health services. In addition, PHC4 produces information used to identify opportunities to contain costs and improve the quality of care delivered.
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