Last year, less than half of acute care hospitals in PA operated within a sustainable financial margin. This alarming statistic indicates that more than half of these hospitals either operated at a loss or barely broke even.

Over the past three years, approximately 39% of hospitals have reported negative margins, suggesting that, on average, they have been losing money during this time. Unfortunately, this trend is on the rise, and hospital administrators are concerned that upcoming Medicaid cuts will only exacerbate the situation. These findings come from the latest report by the Pennsylvania Health Care Cost Containment Council (PHCCC), which assesses the financial health and sustainability of hospitals and health systems across the Commonwealth. While the report does highlight a few positive developments, such as some signs of recovery, the overall financial outlook for hospitals raises significant concerns.

To address these issues, I plan to introduce legislation that would establish an annual Health Care Cost Growth Benchmark. This initiative is modeled after a successful cost containment law in Massachusetts. Under this plan, the PHCCC would be responsible for setting a target each year to limit the growth of total health care spending in line with the state’s economic growth. Health systems or insurers that exceed this benchmark would be required to submit a performance improvement plan to realign their costs.

The goal of this legislation is to ensure that health care spending in Pennsylvania remains sustainable, that care stays affordable for residents, and that market consolidation and pricing practices are consistently monitored.

I invite you to join me in advocating for a transparent and innovative health care system that is accountable to the residents of the Commonwealth, delivering better health outcomes and high-quality care at a lower cost for everyone.