Stamford Hospital achieved a 23 percent increase in its operating margin in 2011, despite a rising need to provide free care to patients who can't pay, hospital officials said.

In the 12-month period ending Sept. 30, the hospital's operating profit was $28 million, compared with $22.7 million from the same period a year earlier.

The improved performance was the result of an increase in outpatient visits from 353,800 to 385,600, said Kevin Gage, the hospital's senior vice president and chief financial officer.

"If you take a look at our trends, it's in keeping with the trend that the growth in health care services is in the outpatient side," Gage said. "With a combination of managing our expenses, it allows us to have a stronger financial performance, which is fairly critical."

Gage noted in-patient admissions slipped from 15,108 to 14,940, a drop he attributed to problems in the economy.

The cost of charity care for patients without private insurance continued to rise from $23.2 million in 2010 to $27.3 million for the 12-month period ending Sept. 30, reflecting more uninsured patients who received care, Gage said.

The previous year, charity care nearly doubled from $11.9 million, according to the hospital.

"It really is a reflection of the softness of the economy and people needing assistance," Gage said.

The hospital also saw the overall cost of uncompensated care it provides jump from $42.8 million to $47.4 million, a pool of costs to treat patients who don't meet the criteria to be charity cases, and are either unable or unwilling to pay for services, Gage said.

Stamford Hospital spokesman Scott Orstad said the improved financial results will help the hospital find favorable financial terms for a planned $575 million project to implement the hospital's master facilities plan over the next 10 to 15 years.

This summer, the hospital began a $62 million project to prepare for a two-phase construction of an 11-story specialty building.

"The more solidly the hospital performs on a consistent basis, the easier it is to obtain capital at a favorable rate," Orstad said.

"Generating income, borrowing capital and raising donations through philanthropy are the three ways the new facility will be paid for."

In 2011, Greenwich Hospital saw its operating margin drop from $13.4 million to $9.6 million, a decline due in part to the state's new 4.6 percent flat tax on hospital income, which cost the facility $2.2 million in fiscal 2011, spokesman George Pawlush said.

The hospital's uncompensated care cost for the fiscal year ending Sept. 30 was $54 million, including free care for the less fortunate, unpaid-for-care, and the impact of low Medicare reimbursement rates, Pawlush said.

"The hospital provider tax was a major factor in our lower margin," Pawlush said., 203-964-2264.