The Minnesota Hospital Association (MHA) today released its annual report examining the financial health of Minnesota’s hospitals and health systems. The report examines publicly available fiscal year (FY) 2018 data – the most recent available – that hospitals and health systems are required to submit to the Minnesota Department of Health (MDH) each year.
While many financial indicators are relevant to a thorough analysis of financial health, a hospital’s operating margin is the most recognizable bottom-line measure of whether a hospital can continue to meet patient and community needs.
Minnesota hospitals’ operating margins declined in 2018. Since 2014, the trend of overall median hospital operating margin in Minnesota has remained steady at just over 2%. In 2018, however, the median operating margin declined to 1.7% – a signal that Minnesota’s hospitals and health systems are experiencing challenges including pressure to reduce costs from both government and commercial payers; health care professional shortages; and increasing costs of products and supplies such as pharmaceuticals, devices and technology systems for electronic health records.
While 51 of the 78 hospitals and health systems shown on the report generated positive operating margins in 2018, MHA noted that 27 hospitals, or 34% of the hospitals and health systems reflected in the report, experienced negative operating margins. This number compares with 26 showing negative operating margins in 2017.
Historically Minnesota’s urban hospitals have had higher margins than rural hospitals; however, the gap has narrowed in recent years. The median operating margin for urban hospitals was 2%, down from 2.8% in 2017. For rural hospitals, the median operating margin was 1.6%, down from 2.1% in 2017.
Read the full report.
The Minnesota Hospital Association represents Minnesota’s hospitals and health systems, which provide quality care for their patients and meet the needs of their communities.
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