Lancaster General's profits went down $27 million in 2008, but it still made more than the combined profits of the other three hospitals in the county.
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And the other three hospitals all increased their profits from 2007 to 2008.
Heart of Lancaster Regional Medical Center made money for the first time since it opened in 2004 in Warwick Township. Its sister hospital, Lancaster Regional Medical Center, also went from red to black, making a small profit.
Ephrata Community increased its bottom line by about $1 million in 2008.
Those were the results of a financial report from the Pennsylvania Health Care Cost Containment Council.
The report showed that Lancaster General made $108.6 million in profits in 2008, down 20 percent from the $135.8 million it made in 2007.
Those profits are from its North Duke Street hospital, Women & Babies Hospital in East Hempfield Township, its health campus and other outpatient centers.
Lancaster General also saw a drop in its profit margin, which went down from 18 percent to 13.7 percent from 2007 to 2008. Health care experts say hospitals should make a minimum margin of 4 percent to 6 percent to remain financially viable.
Despite the drop in profits, Lancaster General still was among the top money-making hospitals in the state, coming in third behind the Hospital of the University of Pennsylvania, in Philadelphia, and the Children's Hospital of Philadelphia.
Both the increasing cost of providing health care services and increased investments in bricks and mortar led to the drop in profits this year at Lancaster General, said spokesman Kim Payne.
Last year, the organization invested $100 million in facilities and medical technology, for the new Downtown Pavilion, the renovation and expansion at Women & Babies Hospital and the construction of an outpatient center near Willow Street.
The health care organization also used its profits to help support parts of its system that were not as profitable, such as the Lancaster General Medical Group, a group of physician practices it owns here.
Payne also noted that Lancaster General provided almost $50 million in services to people who had little or no ability to pay for medical services they received.
The improvement in finances at Heart and Regional is due to better relationships with doctors at both hospitals, said James Machado, chief financial officer at Heart.
Heart's profit was $2.8 million in 2008. Its profit margin was 9.2 percent. Regional's profit was $368,000. Its profit margin was .71 percent.
The two hospitals are owned by Health Management Associates, a hospital chain based in Florida.
"In general terms, our commitment to the market has changed, from a company standpoint," Machado said of HMA.
In recent years, rumors circulated about whether HMA was staying in the local health care market or was going to sell the hospitals, he said.
"That affects your results, no question about it," he said, leading to weaker financial performance.
But HMA is committed to being here, and to building better links to physicians, he said. Those doctors are now committing themselves to the hospitals, he said.
"When that happens, volumes increase and revenues increase," he said.
Ephrata Community Hospital saw profits of $12.8 million in 2008. Its profit margin was 7.5 percent.
In fiscal year 2008, which runs from July 2007 to June 2008, Ephrata saw an increase in the use of outpatient services, said spokeswoman Joanne Eshelman.
Ephrata also saw increased revenue from a new laboratory and imaging center in Ephrata and a new quick care center in New Holland.
But finances are tightening, Eshelman said.
"The fiscal health of hospitals has changed," she said, noting that this year's profits may not look as rosy, as the hospital has seen fewer visits to its emergency room and to its outpatient services.
Staff writer Cindy Stauffer can be reached at cstauffer@LNPnews.com or 481-6024.
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