Number, Margins Of Ambulatory Surgery Centers Increased In Pennsylvania

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The number of ambulatory surgery centers in Pennsylvania increased in 2007, and total operating margins for the facilities increased from 20.85% in fiscal year 2006 to 24.74% in FY 2007, according to a report released by the Pennsylvania Health Care Cost Containment Council, the Philadelphia Inquirer reports.

According to the report, margins have increased at an average rate of 2.2 percentage points annually since FY 2001 (Burling, Philadelphia Inquirer, 11/25). The report found that there are 245 centers statewide, including 17 new centers that opened between June 2007 and May 2008 (Raffaele, AP/Pittsburgh Post-Gazette, 11/25).

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The ambulatory surgery centers' net patient revenue for FY 2007 was $707.3 million -- equal to 6.2% of general hospital outpatient revenue in FY 2007, according to the report. General hospitals reported that 11.4% of their patients were Medicaid beneficiaries, compared with 3.3% of outpatient center patients. Hospitals also had more cases of unpaid or uncompensated care at 2.27%, compared with 0.42% at outpatient surgery centers.

The average operating margins at long-term acute-care hospitals dropped from 3.72% in FY 2006 to 3.09% in FY 2007 as a result of a decline in new Medicare enrollments (Philadelphia Inquirer, 11/25). The state's 25 long-term acute care hospitals also reported that discharges of Medicare beneficiaries declined by 6% to 7,768 between FY 2006 and FY 2007. Medicare reimbursements accounted for more than two-thirds of hospital revenue in 2007, and the patient decline was largely responsible for hospitals' operating profit margins declining by less than one percentage point over the same period, according to the council (AP/Pittsburgh Post-Gazette, 11/25).

The Hospital & Health System Association of Pennsylvania on Monday in a statement said the "proliferation of ambulatory-surgery centers continues to increase the pressure on acute-care hospitals at the same time that the national economic downturn threatens to further weaken the health care safety net" (Philadelphia Inquirer, 11/25). Carolyn Scanlan, president and CEO of the group, said, "It is imperative for policymakers ... to understand the role played by acute-care hospitals, both as centers of high-quality care and as economic engines in communities of all sizes" (AP/Pittsburgh Post-Gazette, 11/25).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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