Finance is a huge component to health care – it can make or break a healthcare provider! My goal is to understand how small hospitals remain profitable and prevent operating loss in the midst of many obstacles, such as strict ACA regulations, higher healthcare costs and increase healthcare demand. I have chosen the article "Western Pennsylvania 's Smaller Hospitals Feeling the Financial Squeeze" published in the Pittsburgh Post-Gazette on October 14, 2016. The article states, “For the 12 months ending June 30, 2016, 19 of the region’s 24 smaller hospitals reported operating losses, and the average operating margin for hospitals with fewer than 100 beds dropped from negative 2.99 percent to negative 3.89 percent in one year.” We have seen several small hospitals merging with large health systems in Western Pennsylvania. For instance, Titusville Are Hospital joined Meadville Medical Center, Corry Memorial Hospital joined Lake Erie College of Osteopathic Medicine Health System, Jameson Hospital joined UPMC Health System, and Southwest Regional Medical Center joined …show more content…
Lukes explained about the difference between a large hospital and small hospital in terms of finance and operations. The Healthcare Council classifies hospitals with less than 100 beds to be small hospitals. They are at a disadvantage compared to larger hospitals because they don’t provide a lot of surgical or specialty services. Patients with more serious or complex conditions must travel to larger teaching hospitals for treatment. Because of this, small hospitals make most of their revenue from outpatient services. When we look at statistics, small hospitals receive 78 percent of their revenue from outpatient services and 22 percent from inpatient services. This is a huge contrast to larger teaching hospitals, in which 44 percent of their business comes from outpatient services and 57% of their business comes from inpatient