Massachusetts Hospital Financial Performance
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Commonwealth Massachusetts Acute Hospital of Massachusetts Financial Performance Fiscal Year 2012, Q1-Q3 Center for Health Information and Analysis October 1, 2011 - June 31, 2012 December 2012 Áron Boros Executive Director Center for Health Information and Analysis Center for About the Fiscal Year 2012, Quarter Three Report Health Information and Analysis On November 5, 2012, Chapter 224 of the Acts of 2012 (Chapter 224) went into effect. Chapter 224 dissolved the Division of Health Care Finance and Policy (Division) and created a new, independent state agency, the Center for Health Information and Analysis (Center). The Center assumed many of the Division’s responsibilities including the reporting of acute hospital financial performance information. The Center continues to supports the Division’s priority of timely, relevant, and accurate information in its Fiscal Year 2012 Quarter Three (FY12Q3) Report. This quarterly edition presents data on the following metrics: total margin, operating margin, non-operating margin, current ratio, and equity financing ratio. Each page allows for easy comparisons between individual hospitals, and provides a clear sense of the performance of hospital cohorts. Further, the bulleted text identifies key trends and provides context. Analysis for certain metrics, such as days in accounts receivable, average payment period, debt service coverage, and cash flow to total debt, will be published annually. These metrics are provided in the databook released concurrently with this report. The Center also continues to publish factsheets for individual hospitals. Center for Key Findings for FY12, Q1-Q3 Health Information and Analysis This report examines hospital profitability, liquidity, and solvency in order to monitor and compare the financial status of acute care hospitals. Presented are industry analyses and comparisons of financial performance trends of different hospital cohorts: teaching hospitals versus community hospitals, and Disproportionate Share Hospitals (DSH) versus Non-Disproportionate Share Hospitals (Non-DSH). The reporting period is based on the fiscal year of the majority of Massachusetts hospitals: October 1st through September 30th. The financial data used in this report is cumulative from quarter one through quarter three, referred to as FY12Q3 throughout this report. Massachusetts Acute Hospital Financial Performance FY12Q3 Medians Total Operating Non-Operating Current Equity Margin Margin Margin Ratio Financing Statewide Median 2.8% 2.4% 0.6% 1.51 38.8% (65 hospitals) 2.1% 1.7% 0.3% 1.52 39.6% Teaching Hospitals 5.0% 3.0% 1.0% 1.59 45.4% (18 hospitals) 3.3% 2.6% 0.2% 1.55 43.4% 2.5% 2.3% 0.5% 1.49 37.3% Community Hospitals (47 hospitals) 1.8% 1.6% 0.3% 1.40 35.3% Disproportionate Share Hospitals (DSH) 1.3% 1.3% 0.3% 1.25 21.5% (29 hospitals) 0.1% 0.1% 0.2% 1.22 12.3% Non-Disproportionate Share Hospitals 3.4% 2.7% 0.8% 1.58 43.7% (Non-DSH) (36 hospitals) 3.1% 2.4% 0.5% 1.59 41.3% Key: FY12Q3 results compared with FY11 year-end results (grey value): Same Value , Improved , Declined . • Overall, Massachusetts acute hospital financial performance improved from FY11 to FY12Q3. • The median total margin increased from 2.1% in FY11 to 2.8% in FY12Q3. Additional Data Most hospitals reported profitable financial performance in FY12Q3. Hospital fact sheets and • Liquidity remained fairly stable with the majority of hospitals able to meet supplemental data released short-term obligations. with this report include • Solvency, as measured by the equity financing ratio, remained fairly stable for additional financial metrics most hospitals. not reported here. • In FY12Q3, hospitals in the Southeast region continued to have the highest median total margin at 5.2% while hospitals in the Central region had the lowest at 1.1%. More information can be found on our website at MA Region Medians Total Margin % www.mass.gov/chia. Statewide Median (65 hospitals) 2.8% Southeast Region (11 hospitals) 5.2% Central Region (8 hospitals) 1.1% Western Region (11 hospitals) 3.6% Metro Boston Region (25 hospitals) 2.4% Northeast Region (10 hospitals) 3.2% Massachusetts Acute Hospital Financial Performance, Fiscal Year 2012 Q3 Page 1 Center for Health Information and Analysis Massachusetts Acute Hospital Profitability Total Margin, FY12 Q3 Total Profitability measures a hospital’s ability to generate earnings as compared to its revenues Hospital Name Type Margin and is expressed here by three ratios: total margin, operating margin, and non-operating margin. Sturdy Memorial Hospital 13.41% Cooley Dickinson Hospital 13.03% Massachusetts Eye and Ear Infirmary T 12.46% Steward Saint Anne’s Hospital D 11.97% Total Margin Berkshire Medical Center T D 11.25% Signature Healthcare Brockton Hospital D 10.85% Total Margin reflects the excess of total revenues over total expenses, including Lahey Clinic T 10.56% North Adams Regional Hospital D 10.29% operating and non-operating activities such as investment income as a percentage Saint Vincent Hospital (FY12) T D 9.89% of total revenue. Profitability improved for the acute hospital industry in FY12Q3. Baystate Medical Center T D 9.81% More hospitals posted a positive total margin, improving from 2.1% in FY11 to 2.8% Massachusetts General Hospital T 9.76% in FY12Q3, driven primarily by improved operating performances. Falmouth Hospital D 9.14% Newton-Wellesley Hospital 9.10% Acute Hospital Total Margin Mount Auburn Hospital T 8.34% Hallmark75th percentileHealth 7.59% Milford Regional Medical Center 6.92% 8.0% 6.7% 75th percentile WinchesterMedian Hospital 6.70% Cape Cod Hospital D 6.53% 6.0% 5.0% 5.3% 25th percentile 4.8% Mercy Medical Center (FY12Q2) D 6.49% 3.8% 4.0% 2.8% Brigham and Women’s Hospital T 6.05% 2.2% 2.6% 2.1% Median New England Baptist Hospital 6.02% 2.0% 0.9% Southcoast Hospitals Group D 5.19% 0.4% 0.1% 0.0% Beth Israel Deaconess Medical Center T 5.11% 0 Boston Children’s Hospital T 4.96% -1.3% 25th percentile Health Alliance Hospital 4.77% -2.0% -2.3% Lowell General Hospital 4.36% -4.0% Fairview Hospital 3.59% FY08 FY09 FY10 FY11 FY12Q3 Northeast Hospital 3.50% Lawrence General Hospital D 3.37% Benchmark: Northeast US median FY10 = 2.3% Beth Israel Deaconess Hospital - Needham 3.27% (Almanac of Hospital Financial and Operating Indicators. INGENIX, 2012) Faulkner Hospital T 3.24% Steward Holy Family Hospital D 3.08% • The median total margin improved from 2.1% in FY11 to 2.8% in FY12Q3. Holyoke Medical Center D 2.85% In FY12Q3, the median total margin for all hospital quartiles improved. Heywood Hospital 2.69% Hospitals in the lowest quartile showed the most improvement, increasing Wing Memorial Hospital and Medical Centers D 2.55% their total margin by 2.3%. Harrington Memorial Hospital 2.49% Dana-Farber Cancer Institute T 2.44% • The median total margin for all hospital cohorts (teaching and community, Emerson Hospital 2.40% DSH, and Non-DSH) improved in FY12Q3. Jordan Hospital 2.37% South Shore Hospital 1.70% • Continuing the trend from the prior period, the median total margin for teaching Nantucket Cottage Hospital 1.48% hospitals was higher then the median total margin for community hospitals in FY12Q3. Saints Medical Center D 1.33% • The median total margin for Non-Disproportionate Share Hospitals (Non-DSH) Anna Jaques Hospital 1.15% Milton Hospital 1.05% out-performed the median total margin for Disproportionate Share Hospitals (DSH) Martha’s Vineyard Hospital (FY12) 0.52% between FY11 and FY12Q3. See Median Total Margin by Cohort table below. Tufts Medical Center T 0.49% Cohort Comparison Boston Medical Center T D 0.32% Baystate Franklin Medical Center D 0.25% North Shore Medical Center D 0.00% Median Total Margin by Cohort Noble Hospital D -0.06% Marlborough Hospital -0.32% FY08 FY09 FY10 FY11 FY12Q3 UMass Memorial Medical Center T D -0.36% Statewide Median Steward St. Elizabeth’s Medical Center T D -0.38% (65 hospitals) 0.9% 2.2% 2.6% 2.1% 2.8% Steward Good Samaritan Medical Center D -0.51% Steward Quincy Medical Center D -0.85% Teaching Baystate Mary Lane Hospital -1.69% (18 hospitals) 3.9% 5.1% 5.3% 3.3% 5.0% MetroWest Medical Center (FY12) -2.42% Community Steward Morton Hospital and Medical Center D -2.53% (47 hospitals) 0.8% 1.7% 2.3% 1.8% 2.5% Steward Carney Hospital, Inc. T D -2.74% DSH Steward Norwood Hospital -3.90% (29 hospitals) -0.4% 1.1% 1.9% 0.1% 1.3% Clinton Hospital D -4.50% Cambridge Health Alliance (FY12) T D -5.36% Non-DSH 0.9% 2.5% 3.1% 3.1% 3.4% Steward Nashoba Valley Medical Center -9.84% (36 hospitals) Athol Memorial Hospital D -12.35% Steward Merrimack Valley Hospital D -17.46% Massachusetts Acute Hospital Financial Performance, Fiscal Year 2012 Q3 Page 2 Key: T: Teaching Hospital, Center for Health Information and Analysis D: Disproportionate Share Hospital Massachusetts Acute Hospital Operating Margin, FY12Q3 Profitability Operating Hospital Name Type Margin Profitability measures a hospital’s ability to generate earnings as compared to its revenues Cooley Dickinson Hospital 12.21% and is expressed here by three ratios: total margin, operating margin, and non-operating margin. Steward Saint Anne’s Hospital D 11.88% Lahey Clinic T 10.51% Berkshire Medical Center T D 10.16% Operating Margin North Adams Regional Hospital D 10.07% Signature Healthcare Brockton Hospital D 9.98% Saint Vincent Hospital (FY12) T D 9.89% Operating Margin is the ratio of operating income/loss to total revenue. It reflects Massachusetts General Hospital T 9.61% revenues and expenses associated with patient care activities, but does not include Sturdy Memorial Hospital 8.72% investments, research, and other non-operating expenses.