The hospital association issued a report last week detailing financial troubles facing the state's hospitals.

As a group, the hospitals' operating margin was 0.8 percent for the first eight months of the 2013 fiscal year, their second-lowest return in 14 years, the report said. Twenty-five of Maryland's 60 hospitals — 42 percent — had negative operating margins, according to the report. In other words, they were losing money caring for patients.

The rate-setting commission increased rates by 0.3 percent last year, when inflation was expected to increase by 2.11 percent, the report said.

In its recommendation, the commission staff said hospitals are more profitable as a group this year than they were last year despite the reduced operating margin. The hospital association countered that profits grew because of stock market gains, which can be volatile.

"I'm more concerned than ever about what I see happening to the financial condition of hospitals in this state," said Ronald R. Peterson, president of the Johns Hopkins Hospital and Health System and executive vice president of Johns Hopkins Medicine.

An earlier version gave an incorrect vote count. The commission voted 5 to 1. The chair only votes in the event of a tie. The Sun regrets the error.

andrea.walker@baltsun.com

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