“A recent report by Pennsylvania’s health care industry watchdog shows that most of the hospitals frequented by Lancaster County residents take in significantly more money than industry experts say is necessary to maintain stable operations,” The Lancaster Online editorial board wrote recently. “As staff writer Heather Stauffer reported in the Money section of the July 29 Sunday LNP: ‘Industry experts say every situation is different, but hospitals generally need an operating surplus of 4 to 6 percent to maintain financial stability. In Lancaster County and the surrounding region, four of five hospitals in the last fiscal year had operating margins roughly twice that high. Statewide, average operating margins have tended to be in that 4 to 6 percent range.’ Since 2012, Lancaster General Hospital’s revenue surplus has been climbing. According to the Pennsylvania Health Care Cost Containment Council, during the five-year period ending June 30, 2017, the county’s dominant hospital banked in excess of a half-billion dollars more than it needed to cover expenses. Last fiscal year alone, the nonprofit hospital tallied a 13.6 percent surplus —$143 million — which is two to three times the cushion industry experts consider reasonable. LGH has plenty of deep-pocketed company. Hershey Medical Center, also a nonprofit, had an 11.1 percent surplus ($166.7 million). Heart of Lancaster Regional Medical Center (now UPMC Pinnacle Lititz) and Lancaster Regional Medical Center (now UPMC Pinnacle Lancaster), which were for-profit hospitals last fiscal year, each had surpluses in excess of 10 percent, and there’s no reason to think those margins will shrink now that UPMC is operating the hospitals as nonprofits.” The Editorial Board, “Nonprofit hospital surpluses raise questions for patients, especially those struggling with medical bills,” lancasteronline.com.
Jeanne Pinder is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded... More by Jeanne Pinder