WNY health care economy blamed for hospitals' losses.(Western New York)(Industry Overview)

Though hospitals in every other region of the state posted record profits in 1997, Western New York facilities collectively finished that year $7.3 million in the red, according to an annual report by the state Department of Health.

Across the state, hospitals together showed a surplus of $739 million in 1997, which represents a more than 42 percent increase over the previous year. On a base of revenues of $25.7 billion, the 1997 surplus amounts to 3 percent, according to the report.

Net surpluses in 1997 ranged from $752,000 in the Watertown area to $337 million in New York City.

Western New York's poor showing is a reflection of the area's different health care economy, one that includes the country's highest managed care penetration …