Connecticut hospitals’ collective operating income decreased 18 percent in fiscal year 2016, but a spike in non-operating income helped more than double the industry’s combined bottom line to $864 million, according to an annual report on the financial status of the state’s short-term acute hospitals.
The report, found here, follows a report in March on hospital performance that has since been updated and aggregated into the annual report released this month.
Hospitals in fiscal 2016 reported operating income of $348.1 million and non-operating income of $515.7 million, which is derived primarily from investments in stocks and bonds, the value of held securities, endowments and charitable contributions.
“While non-operating income is helpful to hospitals during times of decreased operating revenue, it may be considered risky to expect these gains to continue indefinitely,” the report said.
The report’s key findings include:
– 71 percent of hospitals (20 of 28) achieved a positive total margin;
– The average statewide total margin was 7.32 percent, up from 3.89 percent in fiscal 2015;
– Six hospitals had negative five-year average total margins in fiscal 2016;
– Total hospital net assets increased by $24 million, to $5.42 billion;
– Bad debts accounted for more than 60 percent of uncompensated care charges and charity care accounted for almost 40 percent versus 62 percent and 38 percent, respectively, in fiscal 2015.
– Uncompensated care charges totaled $663 million, up 3 percent from fiscal 2015;
– The trend toward hospitals becoming part of larger hospital networks continued.
