By J.D. Davidson | The Center Square
(The Center Square) – Rising costs and rising salaries have many hospitals in Wisconsin operating at a loss.
The Wisconsin Hospital Association is out with a new report that says nearly a third of all hospitals in the state are losing money.
“Between FY2021 and FY2023, hospitals experienced a 40.8% decrease in their operating margins, with 82 out of 167 hospitals reporting a decline. Fifty-five hospitals – approximately 33% of all hospitals in the state – are now operating at a loss. Health systems also reported a 117.8% decrease in operating margins, reaching -0.8% in FY2023,” the report states.
The report looks at a variety of hospitals across Wisconsin, including general hospitals, psychiatric hospitals, rehab facilities and even state hospitals.
As a group, hospitals across Wisconsin have seen their revenues jump over the past 30 years, but payments have not kept up with skyrocketing costs.
“Between fiscal years 1993 and 2023, total gross patient revenue (charges) at Wisconsin hospitals increased from $6.8 billion to $86.2 billion. Net patient revenue increased from $5.0 billion to $27.8 billion, and expenses increased from $5.2 billion to $28.0 billion. Net income increased from $241.7 million to $2.1 billion. In FY 1993, hospitals collected 74% of their charges. In FY 2023, they collected 32.3 percent,” the report adds.
One of the biggest reasons for the gap is the cost of doing business.
“As a proportion of total expenses, overall salaries and fringe benefits for Wisconsin [general] hospitals have decreased over time, from 52.4% in FY 1993 to 41.6% in FY 2023,” the report notes. “The supplies and services proportion has increased from 36.8 percent to 52.7%.”
That’s not to say that hospitals are paying doctors, nurses and other employees less.
In fact, the Hospital Association says the recent workforce shortage drove salaries higher.
The Hospital Association says inflation has simply pushed the cost of other hospital needs even higher.
Then there are the growing number of people relying on government health care and the growing number of people who turn to the ER as opposed to a regular doctor.
“Safety net hospitals, which serve populations with higher Medicaid coverage, are also reporting losses. In FY2023, 38.1% of Wisconsin’s safety net hospitals – 32 out of 84 such facilities – reported financial losses, up from 33.7% in the previous year,” the Hospital Association said. “Emergency department utilization has also increased, with nearly 2.4 million visits in FY2023, a 13.5% increase from FY2021.”
Syndicated with permission from The Center Square.
