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CA Hospital Margins on the Rise

Cheryl Clark, for HealthLeaders Media, December 20, 2012

Positive net income: The percentage of California hospitals that have a positive net income ranged from investor hospitals at 80% to city/county hospitals at 47.4% in 2010. The state average in 2010 was about 77%, increasing from 67.5% in 2006.

Payments from private managed care health plans were substantially higher than from Medicare or Medi-Cal, the state's Medicaid program. They increased from $3,627 per adjusted day in 2006 to $5,054 per adjusted day in 2010, or by 39%.

Labor costs, including salaries, wages and employee benefits, were substantially higher and increased faster than any other expense category, from $28.1 billion in 2006 to $36.4 billion in 1010, or by 29.5%.

Length of stay over the five-year period decreased by about one-fifth of a day for all payer types, but decreased the most, by nearly a half a day, for Medicare and self-pay or indigent patients.

Medi-Cal patients also had the longest length of stay, 6.22 days, two days more than private, non-Medicare, non-Medicaid third party payers, which had only 4.22-day lengths of stay.

Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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