The financial strength of US Catholic Hospital Organizations, which hold an extensive treasure chest of investments in common stocks and bonds, was just devastated in 2008 by the financial meltdown of the US economy.
However, in near miraculous fashion, this financial strength of these Catholic Hospitals has been resurrected in the past two years, due mainly to many wise actions by the Obama Administration, by the Fed, and by the US Congress, which created a US economic infrastructure which permitted US large businesses to flourish.
From an extensive review of the financial statements of Catholic Hospitals, I found 22 of them with Net Assets (i.e. Excess of Total Assets over Total Liabilities) of more than $800 mil each. These financial statements were found mainly in two very fine Internet sources: DAC Bond and EMMA (i.e. Electronic Municipal Market Access of the Municipal Securities Rulemaking Board).
These 22 Catholic Hospital Organizations had total Net Assets of $63.55 bil at the most recent balance sheet date, which was March 31, 2011 for most of them.
In comparison, the total Net Assets of these same 22 Catholic Hospital Organization was $49.33 bil at their respective fiscal year ends of the closest date to two years earlier.
Thus, the Net Assets of these 22 Catholic Hospital Organizations increased by $14.22 bil, or by 29%, in the most recent two years.
When you think about it, that 29% Net Asset growth in only two years is just incredible. The overwhelming majority of the Net Assets balance at any time is the cumulative tax-free profits, both from hospital operations and from investments, since the inception of the hospital organizations.
In just the most recent two years, these 22 Catholic Hospital Organizations generated a 29% profit growth on their Net Asset balance of two years ago, which was accumulated over decades and decades of hospital operations and investment returns.
Clearly, the executives of Catholic Hospitals, all employees of Catholic Hospitals, the Board of Directors of Catholic Hospitals, and the bondholders of these Catholic Hospitals have to all be elated with what has happened with the financial strength of their Catholic Hospitals during the Obama Administration.
Let me illustrate what drives the growth in a hospital organization’s Net Assets by focusing on the largest Catholic Hospital Organization, Ascension Health.
At the end of its 2009 fiscal year, on June 30, 2009, Ascension Health had total Net Assets of $8.3 bil. At its most recent March 31, 2011 balance sheet, twenty one months later, its total Net Assets have grown to $11.1 bil, or an increase of $2.8 bil.
Let me lay out the key components of this $2.8 bil increase in Ascension Health’s Net Assets.
For the most recent 21 Months, Ascension Health generated:
…Net Hospital Operating Income of…………........ $950 mil
…Non-operating Investment Returns of..........$1,783 mil
…Other items-net of…………………………………..........$64 mil
= Total increase in Net Assets……………............$2,797 mil
Yeah, that’s right, due mainly to the substantial strengthening of the US economy in the past 21 months, Ascension Health’s total Investment Returns of $1,783 mil, were nearly double its Net Operating Income from its hospital operations of $950 mil over the same period.
Here are these 22 Catholic Hospital Organizations:
.........Hospital Organization...............HQs.....Fiscal Year End(FYE)
Ascension Health.....................St Louis, MO..............June
Catholic Health Initiatives........Denver, CO...............June
Providence Health....................Seattle, WA...............Dec
Trinity Health...........................Novi, MI..................June
Catholic Healthcare West..........San Fran, CA.............June
Catholic Health East..................Newton Square, PA...Dec
Sisters Charity Leavenworth......Lenexa, KS...............Dec
Sisters of Mercy Health System..St Louis, MO.............June
Christus Health.........................Houston, TX..............June
Marian Health System...............Tulsa, OK...................Dec
Catholic Health Partners...........Cincinnati, OH...........Dec
St Joseph Health System...........Orange, CA................June
Hospital Sisters Services...........Springfield, IL...........June
Franciscan Alliance..................Mishawaka, IN...........Dec
SSM Health Care........................St Louis, MO..............Dec
Saint Francis Health System......Tulsa, OK..................June
PeaceHealth.............................Bellevue, WA.............June
Via Christi Health.....................Wichita, KS................Sep
OSF Healthcare System.............Peoria, IL..................Sep
Ministry Health Care................Milwaukee, WI...........Sep
Catholic Health Services...........Long Island, NY.........Dec
Bon Secours Health System.......Baltimore, MD..........Aug
And below here are these 22 Catholic Hospital Organizations’ Net Asset amounts, and their increases over roughly the most recent two years.
...............................................................Two Years
...................................Most Recent........Earlier FYE
..................................Balance Sheet......Balance Sheet
...............................................Net.....................Net......Increase
Hospital Group..........Date....Assets......Date....Assets..Amount..%
...........................................mils of $s.................mils of $s....
Ascension Health.....Mar 11..11,072....Jun 09..8,275...2,797..34%
Cath Hlth Initives.....Mar 11....7,121....Jun 09..5,505....1,616..29%
Providence Health....Mar 11...5,254.....Dec 08..3,911...1,343..34%
Trinity Health...........Mar 11...4,992.....Jun 09..4,030.....962..24%
Cath Hlthcare West...Mar 11...4,937.....Jun 09..3,622...1,315..36%
Cath Health East.......Mar 11...2,847.....Dec 08..1,978......869..44%
Sistrs Char Lvnwrth..Mar 11...2,784.....Dec 08..2,571......213...8%
Sistrs Mrcy Hlth Sys.Dec 10...2,507.....Jun 09..2,118......389..18%
Christus Health.........Mar 11...2,434.....Jun 09..2,119......315..15%
Marian Health Syst...Dec 10...2,337.....Dec 08..2,103......234..11%
Cath Hlth Partners....Mar 11...2,314.....Dec 08...1,614.....700..43%
St Joseph Hlth Sys....Mar 11...2,676.....Jun 09..2,076.....600..29%
Hospital Ssters Svcs..Mar 11...2,016.....Jun 09..1,697.....319..19%
Franciscan Alliance...Mar 11...1,985.....Dec 08..1,463.....522..36%
SSM Health Care........Mar 11...1,501.....Dec 08.....942.....559..59%
St Francis Hlth Syst...Mar 11...1,230.....Jun 09.....946.....284..30%
PeaceHealth..............Mar 11...1,019.....Jun 09.....897.....122..14%
Via Christi Health......Mar 11......990.....Sep 09.....846.....144..17%
OSF Hlthcare System.Mar 11......954.....Sep 09.....684.....270..39%
Ministry Health Care.Mar 11......880.....Sep 08.....674.....206..31%
Cath Hlth Services.....Mar 11......852.....Dec 08.....561.....291..52%
Bon Secours Hlth Sys.Feb 11......851.....Aug 09.....703.....148..21%
Total 22 Hospital
.....Organizations.................63,553................49,335..14,218.29%
Yeah, that's right, all 22 Catholic Hospital Groups registered increases in their Net Assets in the past two years. And all of these increases were very healthy.
In my next post, I’ll do a similar analysis of Net Assets in the past two years of many of the numerous huge Non-Catholic, Non-Profit Hospital Organizations.
And then in later posts, I’ll be analyzing the Operating Results of both Big Catholic Hospital and many Big non-Catholic Hospital Organizations in the most recent three years.
But the question that I think has to be answered....In all fairness, just like Health Insurance Corps should, shouldn't Hospital Organizations also be reducing their stiff prices in order to both patriotically and compassionately help reduce total US health care costs, to help suffering US individual hospital patients, to ease the health care burdens on US businesses, and to soften both the crushing US Federal Deficit and the many State Government severely-stressed Budgets?
