In a June 12th front page article titled “Fiscal health of hospitals: mixed”, The New Era endeavors to explain (rationalize) Lancaster General Hospital’s amazing $135.8 million profit, up 27.5 percent from 2006, as follows:
“Though the large size of its facilities alone would seem to guarantee big revenues and profits, LGH is exceptionally efficient inside those facilities, the council report shows.
“LGH had an operating profit margin of 18.12 percent, meaning that for every dollar of revenue generated by patient care, about 18 cents was profit. That’s about four times the minimum margin that industry analysts say is needed for a healthy bottom line.”
WATCHDOG:
Even the dullest Introductory Economics student, let alone a reporter and editor worth half their salt, would recognize that a major reason for such unusual profits might be non-competitive market conditions that permit higher prices and thus higher profits than would be normal.
In their usual way when it comes to covering the Big Five – Franklin & Marshall College, Fulton Bank, The High Group, Lancaster General Hospital and The Lancaster Newspapers – the article poses no challenging questions, cites no critics, and serves as a rooting section: Aren’t we just great!
