Hospital margins shrink in New Jersey

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Investment losses and rising pension costs eroded the finances of New Jersey's hospitals in 2011, reported the Newark Star-Ledger.

In fact, the Garden State's hospitals reported their smallest profit margins in three years, while a third of its hospitals posted losses, according to data compiled by the New Jersey Hospital Association.

"(Hospitals') efforts to deliver high quality healthcare services while improving the efficiency of their operations are reflected in an improved operating margin," said NJHA President and CEO Betsy Ryan in a statement. "But they continue to confront an array of financial pressures that drag down other key financial measures."

The average operating margin in 2011 was 3 percent, up from 2.3 percent in 2010. But after including pension obligations and investments, the total net margin was 0.3 percent in 2011, down from 4.7 percent in 2010, according to the NJHA.

"The good news is our heads are above water," Sean Hopkins, senior vice president of health economics at the NJHA, told the Star-Ledger. "The bad news is we are still lagging behind other hospitals in the country."

The national median margin for hospitals is 3.2 percent.

To learn more:
- read the Star-Ledger article
- here's the New Jersey Hospital Association statement

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