Mass. hospital profits dropped significantly over last year

Photo | Grant Welker Saint Vincent Hospital in Worcester

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By Alexander MacDougall

Hospital profits have fallen significantly across the state, including hospital systems based in Central Massachusetts, according to the latest report by the Center for Health Information and Analysis.

The CHIA, an independent state agency that monitors and provides analysis for the healthcare industry in Massachusetts, released its latest quarterly report on the financial performance of hospital systems across the state on Thursday, measuring profit margins during the timespan from March 2021 to March 2022.

The report showed median operating margins for hospitals across the state had fallen into negative territory during that timespan, with such profits at -2.5% statewide, down 2.7 percentage points from March 2021. Teaching hospitals experienced the biggest drop, going from an operating margin of 1.4% to 4.6%.

For median total margins, hospitals experienced a decrease of 6.8 percentage points, for a total profit of -3.1%.

The UMass Memorial Health system, which operates several hospitals across Central Massachusetts, reported an operating margin of -7.4% over the last six months across its locations. UMass Memorial Medical Center, its flagship hospital with campuses in Worcester, reported operating margins of -5.1%.

Hospitals in Central Massachusetts run by Tenet Healthcare Corp., a nationwide for-profit company based in Texas, posted significant profit losses over the past year. Saint Vincent Hospital in Worcester reported both operational and total margin losses of -11.2% over the past three months, while MetroWest Medical Center in Framingham posted operational losses of -12.5%.

Other healthcare systems based in Central Mass include Milford Regional Medical Center, whose hospital and physician group combined for -1.3% operating margin, and Heywood Healthcare in Gardner, with operating margins of 0.3%. In the time since the report’s timespan, Heywood has entered in an agreement to join the UMass Memorial system.

In a statement put out by the Massachusetts Health and Hospital Association, the reports depiction of a struggling healthcare system in the state in 2022 can be attributed to the surging inflation across the country, as well as lingering effects from the COVID-19 pandemic, including the Omicron variant spike in cases.

“Inflation has added an entirely new layer to healthcare organizations’ financial pressures in 2022,” said the MHA statement. “Unlike other sectors, providers cannot simply pass along the increased costs of labor, energy, and supplies to consumers.”

The statement noted ongoing state and federal pandemic relief funds had helped hospitals maintain operation despite such losses.