Office of Health Strategy Releases Annual Hospital and Health System Financial Status and Facility Fees Trend Reports
FOR IMMEDIATE RELEASE
December 8, 2021
(Hartford, CT) – The Connecticut Office of Health Strategy (OHS) released two annual reports prepared by the Health Systems Planning unit as a guide to policymakers to provide insight on the financial health and performance of Connecticut’s hospitals and health systems. The Annual Report on the Financial Status of Connecticut’s Short Term Acute Care Hospitals details the financial standing of Connecticut’s acute care hospitals and health systems for federal fiscal year (FFY) 2020. The annual Facility Fee Trend report, also released includes revenue from certain types of facility fees, the healthcare procedures that generate those fees, and five-year trend data for calendar year (CY) 2020.
The Annual Report on the Financial Status of Connecticut’s Short Term Acute Care Hospitals, features statewide and individual hospital and health system fiscal trends and financial performance, including data on revenue, expenses, and operating and total margins of Connecticut’s hospitals. The financial stability report focuses on measures involving profitability, cost data, liquidity, solvency, net assets, discharges by payer, and levels of uncompensated care, which are considered strong indicators of a hospital’s financial and operating strength.
OHS, as mandated by section §19a-670 of the general statutes, is responsible for the collection, analysis, and dissemination of acute care hospital and health system financial information. All short-term acute care general or children’s hospitals are required to annually submit financial and statistical information to OHS based on the previous federal fiscal year (October 1st through September 30th). The hospitals’ audited financial statements are a primary source of the information in the report.
Key findings from the detailed Annual Report on the Financial Status of Connecticut’s Short Term Acute Care Hospitalsinclude:
- In Federal Fiscal Year 2020, the statewide total gain from patient care and related sources (or operating revenue) for Connecticut hospitals was $40.9 million, a decrease of 93% from the prior year.
- Operating expenses rose 8.7% to $13.6 billion from the previous year, which was attributed to increases in salaries and wages (6%), fringe benefits (22%), and other operating expenses (12%).
- Hospitals statewide earned $324.6 million from sources unrelated to patient care (or non-operating revenue), such as revenue from investments, unrealized gains on investment holdings, and gains from affiliates or joint ventures. This represents a 393% increase from the $65.8 million earned in FY 2019 and is due in part to increases in the financial markets.
- Statewide hospital net assets increased by $428 million from FY 2019 to $7.67 billion in FY 2020, while stockholder equity increased by $32 million to $123 million.
- Sixty seven percent (18 of 27), of hospitals achieved a positive total margin, which includes gains from patient care, other operating revenue, and non-operating revenues. The statewide total margin for hospitals was 2.61% in FY 2020, a drop from the statewide total margin of 5.17% in the previous year. The five-year average total margin was 5.51%.
- Nine health systems (hospitals and their related entities) reported positive total margins: one more than FY 2019.The statewide average total margin for health systems was .23% compared with 2.78% in FY 2019.
- Statewide hospital uncompensated care charges totaled $774 million in FY 2020, a $32 million or 3.9% decrease from the prior year.
- Bad debts accounted for 52% of uncompensated care charges in FY 2020 while charity care accounted for 48%; virtually the same as FY 2019.
In accordance with §19a-508c of the Connecticut General Statutes, hospitals and health systems are required annually to report calendar year facility fee data.
Key findings from the CY 2020 Facility Fee report include:
- Outpatient facility fees are down 18.0 % to $358.5 million; patient visits generating facility fees decreased 24.3% in that same period.
- In Calendar Year 2020, cardiovascular procedures generated the most facility fee revenue, nearly $19 million.
- Sixty two percent of the facility fee revenue was paid by employer and commercial health plans on behalf of policyholders; these health plans also paid the highest average facility fees at $620 per visit.
- The top three provider locations generating the most facility fee revenues were Tully Health Center at Stamford Hospital, the Oncology Center at St. Mary’s Hospital, and Norwalk Hospital’s Radiology and Mammography Center.
“Statewide, the financial performance of Connecticut’s hospitals and health care systems was substantially impacted by the COVID-19 pandemic. The significant drop in utilization of elective inpatient and outpatient services, as hospitals worked to intervene and treat residents during the height of the pandemic, is also reflected in a significant drop in facility fee revenue at nearly all hospitals,” OHS Executive Director Vicki Veltri noted. “An infusion of over $1 billion in COVID-19 relief funds from the federal government and subsequent state supports provided aid. Despite the impact of the pandemic, most hospitals retain significant net assets, and the majority of hospitals and three-quarters of our health systems ended FFY 2020 with positive total margins due in part to the strong performance of the financial markets.”
Detailed FFY 2021 financial status and CY 2021 facility fee data will be available in September 2022.
Contact: Tina (Kumar) Hyde
Manager of External Affairs, Connecticut Office of Health Strategy
Cell: (860) 969.7228