Penn State Health Lancaster Medical Center’s financial status improved considerably from 2024 to 2025, during which time it shaved off almost $40 million of its operating deficit, according to an independent report from the Pennsylvania Health Care Cost Containment Council.
This was just one piece of information gleaned in the annual financial analysis that provides data on the fiscal health of Pennsylvania’s hospitals. Here’s more on how Lancaster Medical Center – the county’s newest hospital — and Lancaster County’s other hospitals, fared in this year’s report.
Penn State Health Lancaster Medical Center
The 142-bed hospital in East Hempfield Township, which cost $325 million to build, opened in 2022. It still showed an operating deficit in 2025, but it improved from $42 million in 2024 to $3.05 million in 2025. Its operating margin, which compares operating income to operating revenue, also improved from -25.71% to -1.39%. These improvements show the facility is meeting the community’s needs, Scott Gilbert, hospital spokesperson, said.
“We attribute the improving financial performance of Penn State Health Lancaster Medical Center to growing demand for the hospital’s services and stronger-than-anticipated patient volume,” Gilbert said. “For example, from 2024 to 2025, inpatient admissions increased 11%, while surgical procedures increased 20%.
“As with any new hospital, Lancaster Medical Center incurred significant startup and continuing fixed costs as it established operations and expanded services. We have always viewed the hospital as a long-term investment in the health and well-being of the Lancaster County community.”
Total net patient revenue for 2025 was $214 million, compared to $161 million in 2024.
Lancaster Medical Center’s rate of uncompensated care was up from 2024 – from 0.93% to 1.83%, as was the share of Medicare that was part of net patient revenue, which went from 32.13% to 34.9%. Both were comparable to state averages – at 1.67% and 36.37% respectively.
Penn Medicine Lancaster General Hospital
Penn Medicine Lancaster General Hospital’s net revenue for 2025 once again ranked 11th in the state for net patient revenue with $1.561 billion, which was more than five times the net revenue of its runner-up in Lancaster County. This can be attributed to the scope of services provided and the volume of patients who utilize those services, spokesperson Marcie Brody said.
“LGH’s revenue numbers directly reflect the volume and intensity of care we deliver,” Brody said. “We operate one of the busiest emergency departments in Pennsylvania — with nearly 100 bays treating over 100,000 patients annually — and offer specialized oncology and cardiology services that smaller community hospitals are not structured to provide. High patient volume paired with high-acuity care naturally drives higher net revenue.”
For 2024, the hospital’s net patient revenue was $1.421 billion.
The 525-bed Lancaster city hospital saw its operating income decrease from $77.1 million in 2024 to $25.9 million in 2025. This reflects, “significant, industry-wide pressures affecting health systems across Pennsylvania,” Brody said. “Operational costs – including rising expenses to recruit and retain talented staff, and increased supply costs for items ranging from medication to surgical devices – continue to outpace reimbursement growth, particularly from government payors like Medicare and Medicaid that reimburse below the actual cost of care.”
The hospital’s operating margin for 2025 was 1.42%, down from 4.75% last year. This is in comparison to the state average of 7.15%. There are differences between LGH and hospitals that are included in the state average, Brody said.
“Statewide operating margin averages include many specialized or non-trauma community facilities that operate with significantly lower overhead,” Brody said.
The hospital’s change in operating expenses from fiscal year 2022 to fiscal year 2025 was 13.35%, compared to the statewide average of 8.22%.
There was not a significant change in uncompensated care, which increased from 1.16% in 2024 to 1.57% in 2025. LGH’s Medicare share of net patient revenue was 35.69% in 2025, compared to 35.34% the prior year.
However, officials expect uncompensated care to increase in the future, given the end of enhanced federal subsidies this year.
As federal ACA (Affordable Care Act) tax credits expire and new enrollment rules take effect, more Pennsylvanians risk losing health coverage or facing higher out-of-pocket costs,” Brody said. “Shifted affordability will inevitably increase uncompensated care pressures across the state’s health systems. To mitigate this impact, LGH maintains robust financial-assistance and patient-navigation programs to help eligible patients identify and secure coverage options early.”
UPMC Lititz
The 148-bed Warwick Township hospital listed one of the highest operating margins in the state at 30.97%, but a UPMC spokesperson said it’s hard to draw conclusions from the data because the hospital is part of a larger health system.
“It is essential to know that UPMC operates as a system and each UPMC hospital operates as part of that system, supported by the strengths, resources and flexibility of UPMC,” said spokesperson Zach Sweger. “UPMC does not file separate financial statements for each of its hospitals. UPMC has always reported its financial results as a system. For attempted reports like this, there is a big difference between a stand-alone hospital and one that is operated as part of a large integrated system.”
UPMC Lititz’s 2024 operating margin was 25.02%.
The hospital’s net patient revenue was $136 million, up from $120 million the previous year. The Medicare share of its net patient revenue was 33.89%.
Total operating income was $45.6 million, which climbed from $32.9 million in 2024. Its operating expenses were $102 million, with a three-year change in operating expenses at 3.34%.
Notably, UPMC Lititz had the highest rate of uncompensated care among Lancaster County hospitals, which aligns with the health system’s mission, Sweger said.
“UPMC contributes more community benefits and charity care than any other health system in Pennsylvania. That includes $746 million in charity care and unreimbursed Medicaid costs (i.e., free care),” Sweger said. “UPMC hospitals care for 18% of all Pennsylvania inpatients, but provide more than 25% of all charity care.”
Sweger also cautioned that the report does not contain the most recent data for the hospital.
“The data they (the Pennsylvania Health Care Cost Containment Council) attempt to present are at least 6 months old (at the time of publication). As you know, a lot can change in 6 months in the evolving world of health care, even if the data were comparing apples to apples. Some could question the usefulness of this report to the general public today.”
WellSpan Ephrata Community Hospital
The 141-bed hospital in Ephrata Borough posted the second highest net patient revenue in the county at $299 million, down from $305 million in 2024. A spokesperson for the health system said there are likely multiple reasons for the drop.
“Patient revenue declined primarily due to higher deductions from factors such as standard reimbursement and billing-related adjustments, increasing industry expenses, as well as a modest increase in charity care,” said Ryan Coyle, WellSpan Ephrata spokesperson. “This FY25 data likely underrepresents the strain many hospitals in Pennsylvania are experiencing today due to the reimbursement changes and health care coverage losses.”
The hospital’s operating income increased from $18 million in 2024 to $20.7 million in 2025. Its operating margin increased from 5.88% to 6.88%. Its change in operating expenses from 2022 to 2025 was minimal – at 1.4%.
The Medicare share of WellSpan Ephrata’s net patient revenue was 27.01%. The hospital’s percent of uncompensated care was 1.74% – the lowest of all county hospitals. But that will likely increase in the future, Coyle said.
“We do expect an increase in FY26, which could result in more patients who can’t afford payment,” Coyle said. “We’re already seeing some early indicators of this trend, including increased charity care activity.
OPERATING INCOME IN FISCAL YEAR 2025, FOLLOWED BY 2024
Penn Medicine Lancaster General Hospital: $25,957,000, $77,138,000
Penn State Health Lancaster Medical Center: -$3,021,000, -$42,044,000
UPMC Lititz: $45,622,000, $32,901,000
WellSpan Ephrata Community Hospital: $20,690,000; $18,065,000
OPERATING MARGINS IN FISCAL YEAR 2025, FOLLOWED BY FISCAL YEAR 2024
Penn Medicine Lancaster General Hospital: 1.42%, 4.75%
Penn State Health Lancaster Medical Center: -25.71%, -1.39%
UPMC Lititz: 30.97%, 25.02%
WellSpan Ephrata Community Hospital: 6.88%, 5.88%
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