Report: R.I. hospitals’ financial health declines

PROVIDENCE – Seven of Rhode Island’s 13 hospitals lost money in fiscal 2006, compared with three in 2005, and local hospitals’ financial health deteriorated in general, a report released today by the R.I. Department of Health shows.

The annual report, “The Health of Rhode Island’s Hospitals,” looks at the hospitals’ financial performance in fiscal 2004, 2005 and 2006 and compares the institutions’ fiscal fitness to that of the Northeast’s hospital industry as a whole.

Compared with other Northeastern hospitals in 2005, Rhode Island hospitals were slightly more profitable and their net worths grew at a faster pace, the report shows. They also had a greater capacity to increase debt, but they had less financial leverage, weaker liquidity and slower collections of their receivables.

As has been reported individually by some hospitals already, however, 2006 was a tough year. The hospitals’ profitability declined, growth in net worths slowed, debt capacity decreased, cash balances weakened and collections slowed.

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Of the nine financial measures examined by the health department, two improved in 2006 while seven worsened.

Using a composite score of those nine measures over three years, the report ranked the hospitals for their financial performance. The top three, in order, were Newport Hospital, Bradley Hospital and The Miriam Hospital.

“Rhode Island’s hospitals are a $2.8 billion dollar industry with an annual payroll of $1.6 billion, and their financial health, particularly among the community hospitals, remains an issue,” Dr. David R. Gifford, the state health director, said in a news release about the report.

“These hospitals are critical to Rhode Island’s health care system and are economic drivers in their own communities,” he added. “Therefore, we need to continue to look at how the independent community hospitals fit into the broader health care system.”

The full fiscal 2006 report, “The Health of Rhode Island’s Hospitals,” is available from the R.I. Department of Health at www.health.ri.gov.

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