PHC4: Pa. hospital margins rise but 37% face losses

• FY24 statewide average hospital operating margin rose to 6.8%.

• 37% of Pa. general acute care hospitals reported losses.

• Uncompensated care for hospitals continues to grow statewide.

PHC4‘s Fiscal Year 24 report reveals higher margins for PA hospitals, yet 37% faced operating losses, and uncompensated care continues to grow. 

The report is the first volume of a three-part series of financial reports published annually by PHC4. Volume One displays financial information from general acute care (GAC) hospitals licensed in Pennsylvania during fiscal year 2024 (FY24). 

“While the data shows many Pennsylvania hospitals experienced relatively healthy margins in fiscal year 2024, 37% lost money on operations and 32% lost money overall,” Barry D. Buckingham, executive director of PHC4, said in a statement. “Also, the continued growth of uncompensated care remains a major concern for Pennsylvania hospitals.” 

The report includes insight into the 153 GAC hospitals licensed in the commonwealth that operated during FY24. In Volume One the statewide average operating margin increased from 2.26% in FY23 to 6.80% in FY24. The data also shows the following in FY24: 

• 37% of PA GAC hospitals posted a negative operating margin  

• 14% of PA GAC hospitals posted an operating margin between 0% and 4%  

• 49% of PA GAC hospitals posted an operating margin higher than 4% 

In addition, Volume One also reports that 32% of Pennsylvania’s GAC hospitals posted a negative total margin, 10% posted a total margin between 0% and 4%, and the remaining 58% posted a total margin higher than 4%. 

“The reasons for the significant increases identified in this year’s report are currently unclear,” Buckingham said. “While the data reflects an upward trend, the underlying factors driving these changes have not been fully identified or analyzed. Further investigation is needed to pinpoint the specific contributors to this growth.” 

PHC4 is an independent council formed under Pennsylvania statute in order to address rapidly growing health care costs. PHC4 produces comparative information about the most efficient and effective health care to individual consumers and group purchasers of health services. PHC4 also produces information used to identify opportunities to contain costs and improve the quality of care delivered.