Demand for charity care rose more than 5 percent at the region's hospitals in the fiscal year ending June 30, while average operating margins dropped from 5 percent in fiscal 2011 to 4.45 percent in 2012.
The survey by the Hospital Council of Western Pennsylvania shows that hospitals are getting hit both high and low -- with more patients unable to pay their bills at a same time hospitals are receiving lower reimbursement because more procedures are being done on an outpatient basis and because more hospital visits are classified as "observations" rather than admissions.
Overall, regional hospitals say they provided $474 million in charity care for fiscal 2012, while bad debt increased by $21 million to $449 million.
In addition to the other factors lowering reimbursement payments, the looming federal fiscal cliff would impose a 2 percent reduction in Medicare payments.
"These additional cuts would be devastating," said Denis Lukes, the hospital council's vice president for payer relations and reimbursement, in a release Wednesday.
The survey data were collected and analyzed based on a survey of 56 Western Pennsylvania hospitals.businessnews