Financial trends for urban Catholic hospitals

To identify some of the reasons for the declining financial health of hospitals in large urban areas, staff from the Catholic Health Association's Department of Research and Information gathered data on such factors as average total profit margins, Medicare PPS margins, payer mix, and deductions from revenue between 1982 and 1989. In addition, the study tracked such indicators as occupancy, admissions, average payment period, and days in accounts receivable. Location and local community context were also studied. Based on the data, the study classified 28 of the 125 Catholic hospitals in large urban areas as "consistently sound," another 27 as "adversely affected," and 14 as "losing ground." The study compared these groups to one another, as well as to a group of nine Catholic hospitals from large urban areas that had closed by 1988. The study revealed that, despite differences in financial performance, consistently sound and adversely affected hospitals exhibited a number of similarities. Over the period covered, for example, the two groups had similar occupancy and received similar percentages of gross patient revenue from Medicare patients, third-party payers, and self-paying patients. Adversely affected hospitals contributed a significantly greater proportion of their resources to care for the poor. Consistently sound hospitals, on the other hand, had significantly fewer families below the poverty line, lower unemployment, and fewer nonwhite residents in their local communities.