More than one third of Massachusetts acute-care hospitals lost money in fiscal 2011, according to a state agency report.
The Division of Health Care Finance and Policy reported that 24 of 65 hospitals, or 37%, operated in the red. The agency studied data from Oct. 1, 2010, to Sept. 30, 2011, the fiscal year for most hospitals in the commonwealth.
According to its findings, the median total margin decreased to 2.1% from 2.6% in the previous fiscal year. Liquidity remained fairly stable with the majority of hospitals “comfortably able to meet short-term obligations,” the division said.
Solvency as measured by equity financing ratios remained stable for most of the industry, but worsened for those hospitals in the lowest quartile, the report said.
The report comes out as Massachusetts prepares to implement a health care cost-containment law that Gov. Deval Patrick signed last month.
Standard & Poor’s, while acknowledging uncertainties, said the law could further compress operating margins.
“Over the longer term, Massachusetts providers could be at a disadvantage if they are unable to cut costs deeply or quickly enough to meet the law’s requirements,” S&P analysts wrote.
The Boston Medical Center, Steward St. Elizabeth’s and Quincy Medical Center suffered the biggest losses among acute-care hospitals — $25.1 million, $20.9 million and $18.5 million, respectively. The Steward Health Care System bought Quincy Medical out of bankruptcy last year.
“Although BMC has made significant improvement in improving core operating performance over the last several years, operating performance is still weak compared to similarly rated hospitals,” Moody’s Investors Service wrote of Boston Medical in May, when it assigned a Baa1 rating to its $117 million of Series 2012 bonds.
The state report cited Massachusetts General Hospital’s $223.9 million profit as the largest.
Moody’s rates Massachusetts’ general obligation bonds Aa1. Standard & Poor’s and Fitch Ratings both assign equivalent ratings of AA-plus.
