Becker's Hospital Review

17 CFO / FINANCE Why a $60 hospital bill from 1955 went viral By Alia Paavola H aving a baby in the U.S. today, depending on the medical care need- ed, can cost hundreds of thou- sands of dollars. That's why a low-cost bill from 1955 gained attention in July, according to Newsweek. The bill, which went viral on Red- dit, was from a birth and a three- night stay in December 1955 at Belleville Hospital in Kansas. The new mom was billed a total of $59.95 for the stay and deliv- ery. The charges show that room, board and nursing services cost $27, the delivery room fee was $15, drugs and medicine cost $11.95, and "care of infant" was $6. One commenter on Reddit es- timated that $59.95 for the stay in 1955 is equivalent to about $600 today. The post, shared in July, was up- voted more than 10,000 times, prompting new parents to share the bills they have received. One Reddit user, Flatline1775, posted: "Just shy of $700k for me. 96 days in the NICU will do that though. I have a happy, healthy 4 year old now though, so it was worth every penny." Other bills for baby deliveries have gained attention since the start of the year. In January, a Kansas couple shared that they received a $270,951 medical bill after the birth of their first child — even though they're both insured. The parents faced the high bill because of a regulation called the "birthday rule." This rule states that a child born with double health insurance eligibility must be en- rolled in the plan belonging to the parent whose birthday comes first in the calendar year. n Hospitals with higher credit ratings weathered greater margin deterioration, Fitch says By Alia Paavola H ospitals with better credit ratings saw greater year-over-year declines in operating margins than those with lower credit ratings, according to an Aug. 3 report from Fitch Ratings. Fitch said the median operating margin for nonprofit U.S. hospitals was 1.5 per- cent in fiscal year 2020, down from 2.3 percent in 2019. However, the decline in operating margins was greater for hospitals and health systems with "AA" and "A" credit ratings. Fitch said the the "AA" credit category fell about 100 basis points and fell more than 100 basis points for the "A" category over the past year. In contrast, hospitals with "BBB" ratings below investment grade categories saw incremental improvements in operating margins. Fitch said hospitals with lower ratings likely saw some improvement for sever- al reasons, including that many took immediate expense reduction efforts and recognized stimulus funding quickly. Fitch also said the smaller sample size may have contributed. Fitch also said hospitals in the "AA" category "were generally more conserva- tive in their CARES stimulus recognition and often did not engage in significant expense reductions." n Scripps records Q3 operating loss, notes cyberattack cost of $112.7M By Alia Paavola S cripps Health said it incurred $112.7 million in lost revenue and added expenses from a May 1 cyberattack. e San Diego-based health system discovered unusual network activity on some of its IT systems May 1, prompting Scripps to take those systems, including its Epic EHR, offline. During nearly one month of EHR downtime, the health system operated using established backup pro- cesses, including offline documentation methods. Its systems were restored by May 26. In its financial report released Aug. 10, Scripps said the ransomware attack negatively affected its operating revenues and expenses for the quarter ending June 30. Scripps estimates that it lost $91.6 million in revenue and incurred $21.1 million in added expenses related to ransomware attack recovery. In addition to direct costs and lost revenue, Scripps faces several proposed class-action lawsuits from the patients affected in the ransomware attack. In its financial report for the third quarter of fiscal year 2021, Scripps recorded revenue of $775.3 million, down 3 percent from the same quarter one year prior. e health system's expenses also rose in the third quarter to $847.1 million, up 13.2 percent from the same quarter in fiscal 2020. Aer factoring in corporate overhead allocation and income tax, Scripps ended the third quarter with an operating loss of $71.6 million. In the same quarter in 2020, Scripps had an operating income of $50.9 million. Scripps ended the third quarter with a net income of $91.2 million, driven by nonoperating gains. In the third quarter of fiscal 2020, Scripps recorded a net income of $308.6 million. n

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