Courtesy of the report
Hospital revenues (Courtesy of the report)

HARTFORD, CT — Twenty-four of Connecticut’s 28 hospitals made a profit in 2018, according to the latest annual report from the Office of Health Strategy.

The statewide profit from patient care and related sources rose to 4.4% from 3.3% in 2017.

The total profit margin for hospitals ranged from a high of 12.1% at Bridgeport to a loss of 11.4% at Middlesex. Middlesex had a one-time adjustment due to pension payouts. Yale-New Haven had the highest profit with $249 million over expenses, followed by St. Francis with $90.3 million over expenses.

On a statewide basis net patient revenue in the 16 health systems, which includes hospital parent corporations and all subsidiaries, increased 8% to $13.4 billion, while operating expenses rose 6% over the previous year.

Yale New Haven Health Services had the largest operating gain of $225.2 million, followed by Hartford HealthCare with a gain of $77.3 million; while the biggest losses were at UConn Health Center, which lost $409.7 million, and Western Connecticut Health System, which lost 27.1 million.

A footnote says that UConn Health Center losses are “due to the high costs associated with teaching and patient services.”

Hospital operating revenues accounted for the majority of total health system operating revenues and gains while system subsidiaries such as medical groups and physician practices, insurance companies, imaging and rehabilitation centers, visiting nurse associations, and real estate companies account for the remaining 14% of operating revenues.

“We are pleased that hospitals’ operating performance has improved and is stable,” Michele Sharp, vice president of communications for the Connecticut Hospital Association, said Wednesday. “Hospitals can then invest in things like workforce development, technology, and community health. However, health systems continue to absorb costs for physician practices, which they subsidize to maintain needed access to care. We continue to review the report.”

The Office of Health Strategy noted in the report that “medical groups and physician practice affiliates account for health system losses, but serve as a referral source for hospital-based services.”

The report states that affiliates that specialize in providing insurance, imaging, outpatient surgeries, mental health and rehabilitation, long term care and visiting nurse associations, real estate, and lab services had a minimal impact on operating gains.

The report also noted that statewide hospital uncompensated care charges totaled $765 million in 2018, a $97 million or 14.5% increase from the prior year. Three hospitals accounted for 60% of this change.

Hospitals statewide also earned $202.6 million from sources unrelated to patient care, a 56% decrease from the $459.6 million earned in 2017.

A second report by the Office of Health Strategy looked at facility fees, which are a service charge for the use of a facility and its equipment.

State law prohibits hospitals, hospital facilities, and health systems from charging facility fees for outpatient evaluation and management of medical conditions except if a previous contract allows for the fees and if a satellite emergency department is delivering care. Hospital-based off-campus outpatient centers must give written notice to patients that they could charge a facility fee and must identify that as separate from any professional fee.

The report found that facility fee revenues are up 1.3% to $422.9 million while the number of patient visits generating these fees decreased 10% over the previous year.

Digestive system and mammography services generated the most facility fee revenue a nearly $82 million. The top three provider locations generating the most facility fee revenues were Tully Health Center at Stamford Hospital, the Naugatuck Valley Surgical Center at St. Mary’s Hospital, and Hartford Hospital’s Eye Surgery Center.

“Healthcare costs are high and growing — we hear that every day from residents, and we see that reflected in the data,” Office of Health Strategy Executive Director Vicki Veltri said. “These reports give us insight into the financial health of our healthcare systems — which are economic drivers — and help policymakers address specific cost areas — like prescription drugs. Everyone, including consumers, has a role in bringing down healthcare costs; information and data is vital to finding those solutions.”