A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Data! Get Your Health Data Here!

Data! Get Your Health Data Here!

December 17, 2008

The Division of Health Care Finance and Policy recently released two reports that provide an in-depth look into the Health Safety Net and the financial performance of Massachusetts’ hospitals.
The Health Safety Net 2008 Annual Report gives an overview of payment experience, utilization patterns, and user demographics in the first year of the Health Safety Net. From Pool Fiscal Year 2007 to Health Safety Net Year 2008, HSN payments to hospitals and community health centers were reduced by 38%.

The first 6 months of HSN08 compared to the same period in the prior year revealed a:

  • 36% reduction in HSN volume for hospitals and community health centers
  • 31% reduction in HSN users
  • 28% reduction in ER bad debt

Findings on HSN user demographics demonstrated that:

  • Nearly 90% of inpatient discharges and payments were for emergency or urgent care
  • The largest share of hospital volume (76%) and payments (88%) were for services for individuals who have the Health Safety Net (HSN) as their primary and only payer.
  • Mental diseases and disorders and alcohol/drug use represented the top two diagnostic categories among inpatient claims.
  • Men used fewer services than women, but payments for their care were higher.
  • Users with no income received the most costly services, comprising 32% of service volume that generated 42% of payments.
  • Single adults account for 70% of hospital volume and 76% of hospital payments.

This report provides comprehensive data on how health reform has reduced residents’ reliance on free care, and valuable insight into how the safety net is currently utilized and funded.

The second report, Massachusetts Acute Hospital Financial Performance: FY04 through FY08 Q3, thoroughly examines the financial status of hospitals across the state over a 5 year period and compares trends among teaching, community and disproportionate share hospitals (DSHs). Overall, Massachusetts acute hospitals experienced declining financial performance during the first three quarters of FY08, with community hospitals suffering the most. Highlights from the report include:

  • While both teaching and community hospitals reported declines in total gains, community hospitals reported steeper operating declines than teaching hospitals.
  • Non-operating margins declined significantly more for teaching hospitals than for community hospitals during the first 3 quarters of FY08
  • Teaching hospitals had significantly higher profitability than community hospitals in each of the past five years. However, both teaching and community hospitals experienced declines in median total margin during the first three quarters of FY08 compared with FY07.
  • Teaching hospitals’ median current ratio improved, but declined for community hospitals suggesting a more difficult time meeting current obligations for community hospitals.
  • DSHs and all other hospitals as a group were less profitable overall during the first three quarters of FY08 than in FY07; however, DSH operating profits improved while all other hospitals as a group experienced steep declines in non-operating profits during the first 3 quarters of FY08.

DHCFP has also included a break down of the individual financial experience of each hospital in the state.

We thank DHCFP for compiling and analyzing all of this important data on the financial situation of Massachusetts hospitals.
Catherine Hammons