The statewide total margin for New Jersey hospitals plummeted from 4.7 percent in FY 2010 to 0.3 percent in 2011 due to a “volatile stock market and required support of pension programs,” according to the report. However, the average operating margin actually improved from 2.3 percent to 3 percent.
“New Jersey hospitals continue to face a delicate balancing act between their mission and their margins,” said NJHA President and CEO Betsy Ryan in a news release. “Their efforts to deliver high-quality healthcare services while improving the efficiency of their operations are reflected in an improved operating margin. But they continue to confront an array of financial pressures that drag down other key financial measures.”
Other key findings from the NJHA’s hospital finances report included:
• The average days cash on hand declined from 53.8 days in 2010 to 49.2 days in 2011.
• The average payment period increased from 73.1 days to 78.5 days.
• The return-on-equity ratio plunged from 12.6 percent in 2010 to 1.4 percent in 2011.
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