One in Three Hospitals Headed for Bankruptcy

As they brace for an era of shrinking government funds and mounting pressure to cut prices for medical services, Massachusetts hospitals face growing financial strains. Two dozen — more than a third of the state's total — lost money last year, including rural community hospitals, urban safety net hospitals, and even affiliates of renowned academic medical centers, according to a new report from the Division of Health Care Finance and Policy.

Among the biggest money losers were Boston Medical Center, which posted a $25.1 million deficit, Steward St. Elizabeth's Medical Center in Brighton, which lost $20.9 million, and Quincy Medical Center, which was $18.5 million in the red. The industry's performance was worse than in 2010, when 16 hospitals posted losses, and in 2009, when 13 were unprofitable. Overall, profit margins for the state's 65 acute care hospitals fell to a razor thin 2.1 percent in 2011, compared with 2.6 percent the prior year, the state report said...

...Many of these hospitals are grappling with financial losses or declining profits at a time when they are having to invest heavily in new electronic medical records and other information systems as well as new clinical programs to enable coordinated care...