According to the NJHA, operating margins of 0.2 percent suggest that hospitals in the state barely broke even financially, which reduces the hospitals’ abilities to reinvest in services and programs.
The low margins can be attributed, in part, to government payors that reimburse hospitals at rates less than their costs, according to the report. The NJHA found that Medicaid pays hospitals only 66 cents on every one dollar hospitals in the state spend on care for Medicaid patients, and Medicare pays hospitals 89 cents on the dollar.
Total margins for hospitals dipped to negative 14.1 percent in 2008, according to the report.
Read the Philadelphia Business Journal‘s report on the New Jersey hospital margins.
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