Association: Difficult R.I. financial environment

CRANSTON – In its “Tracking Trends” report for Winter 2011, the Hospital Association of Rhode Island painted a picture of “significant challenges” for Rhode Island’s hospitals, including “operating margins … far below” regional and national averages.
In 2010, according to the report, six of Rhode Island’s 11 acute care hospitals recorded negative operating margins in 2010. “These margins will be further challenged in the future due to rising uncompensated care, state budget cuts, and payment reductions related to health reform,” the report said.
The rate of reimbursement from Medicare – through which hospitals in Rhode Island receive 89 cents for every dollar of care provided, along with the increasing cost of uncompensated care – $150 million in 2010, a 17 percent increase from 2009 – are major factors in declining hospital revenues to Mike Souza, vice president of finance at the association.
Souza had made a similar presentation in January to the R.I. Senate Commission studying hospital costs, addressing the difficult that hospitals have in keeping revenues above costs. “Hospitals are going to struggle to survive,” he said.
The commission is asking for public testimony at its next hearing on Feb. 9 at 2 p.m.
Some of the things that may help improve the situation, Souza told the Providence Business News, will be the ability to provide health insurance to Rhode Islanders who are currently uninsured. “Once the uninsured become insured, that will help,” Souza said, talking about plans under federal health care reform to provide insurance coverage.
Additional sources of revenue, such as Lifespan’s research division for Rhode Island Hospital, The Miriam Hospital and Bradley Hospital, which in fiscal 2010 brought in about $80 million in funding from sources outside Rhode Island, employing some 850 people, were not counted in association’s revenue figures, Souza said.