And it wasn't just the massive amounts of investments in common stocks and bonds which were on the books of these US Catholic Hospitals. In addition, there are massive amounts of investments in common stocks and bonds that are off books, in footnotes. These would be these investments in pension trusts of Catholic Hospitals.
And in addition, there are so many financial swaps entered into by Catholic Hospitals.
Further, when you review the type of investments in bonds and other debt instruments, you can see there are many that were investments in US Government Agencies like Fannie Mae and Freddie Mac. Also, there are many investments in residential mortgages backed by Fannie Mae and Freddie Mac.
When you go back to the financial meltdown in 2008, not only did the stock market end up crashing, but also so many financial institutions were about to go belly up.
And because of their massive losses, mostly driven by both Credit Losses and Derivative Losses, both Fannie Mae and Freddie Mac were bankrupt, with losses so large and expected to continue for many years.
Thus so many Non-Profit Hospitals, both Catholic and Non-Catholic, were also in serious financial jeopardy. Not only did their investments in common stocks crash, but they had massive investments in debt instruments linked to Fannie Mae and Freddie Mac, two flat out bankrupt entities.
And they also had investments in US corporate debt, where the corporations had huge amounts of debt instruments linked to Fannie Mae and Freddie Mac.
And much of these hospital investments in US corporate debt were with corporations whose earnings had collapsed with the deep recession.
Further, many of these Non-Profit Hospitals took huge losses on their financial swaps.
When a typical person thinks of Non-Profit Hospitals, they expect to see a massive amount of Property and Equipment on the balance sheet. Thus, this person wouldn't expect to see Non-Profit Hospitals substantially impacted much by the financial meltdown of 2008.
But so many of these Non-Profit Hospitals held investments in equity and debt instruments that far exceed their investments in Hard Hospital Assets. And when you also factor in all of the equity and debt instruments held in the pension trusts of Non-Profit Hospitals, this excess of Soft Investments in Equity and Debt Instruments over Hard Investments in Property and Equipment balloons up.
Further, with the deep, lengthy recession, hospital bad debts from patient accounts receivable were continually going through the roof. And so were hospital charity care costs, which were also continually and dramatically increasing due to the deep, lengthy recession.
When I get some time, I will later be a lot more specific on the balance sheet and income statement makeups of some of these huge Non-Profit Hospitals.
But for now, suffice it to say that many Non-Profit Hospitals were in serious financial jeopardy in late 2008 and early 2009, before the Obama Team, aided by the Fed, went into action.
The end result was a stock market that subsequently nearly doubled over the next three years, a rescue of the auto industry, and a massive turn around of so many financial institutions which were clearly headed for the junk pile, including AIG, Merrill Lynch, Wachovia, Bank of America, Citigroup, and so many banks.
These financial institutions were all cleaned up by the Obama Administration, with able assistance from the Fed, with an overall result of not costing US taxpayers a dime.
The clear exceptions are Fannie Mae and Freddie Mac, which were overseen by an independent government entity, and thus the Obama Administration had no control over.
And after many years of massive losses, even both Fannie Mae and Freddie Mac registered positive Pretax Income in the most recent 1Q 2012. I have a hunch that the independent government entity overseeing Fannie and Freddie might have decided to start listening to the financial recommendations of the Obama Administration regarding Fannie and Freddie. After all, there was a magical financial turnaround in both Fannie and Freddie in the most recent quarter. Let's hope it continues.
And hospital investments in debt securities of corporations were subsequently enhanced in value by the dramatically higher earnings of these corporations, making their debt securities much more secure.
Thus, in near miraculous fashion, this severely-damaged financial strength of these Non-Profit Hospitals has been resurrected in the most recent three years, due mainly to many wise, decisive actions by the Obama Administration, coupled with assistance by actions by the Fed, which created a US economic infrastructure which permitted US businesses, of all sizes and in all industries, to flourish. Thus the investments of these Non-Profit Hospitals in stocks and debt instruments of US businesses have also been substantially enhanced.
Total Net Assets, or the Excess of Total Assets over Total Liabilities, is the singularly salient measure of the financial strength of a Non-Profit Hospital.
When the Total Net Assets of a Non-Profit Hospital increases significantly, with this enhanced financial strength, the Hospital can now borrow at more favorable interest rates. And they can refinance a good chunk of their existing higher interest rate hospital borrowings at the current, lower prevailing interest rates. And the Fed has really helped on interest rates here.
In my earlier recent post on US 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, and which had comparable Net Asset disclosures in the most recent three-year period. These financial statements of Hospitals 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 $70.3 bil at the most recent reported balance sheet date, which was March 31, 2012 for most of them.
In comparison, the total Net Assets of these same 22 Catholic Hospital Organizations was $63.6 bil one year ago, and was $49.3 bil at their respective fiscal year ends (FYEs) of the closest date to three years earlier.
Thus, the Net Assets of these 22 Catholic Hospital Organizations increased by $21 bil, or by 42%, in just the most recent three years, or during the entire Obama Administration so far.
When you think about it, that 42% Net Asset growth in only three 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 three years, these 22 Catholic Hospital Organizations generated a 42% profit growth on their Net Asset balance of three 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, all retirees of Catholic Hospitals, the Board of Directors of Catholic Hospitals, and the bondholders of these Catholic Hospitals have to all be just elated with what has happened with the financial strength of their Catholic Hospitals during the Obama Administration.
In this post, I am addressing the US Non-Catholic, Non-Profit Hospitals. With a quick review, I found 81 of these Hospital Organizations which had Total Net Assets above $1 bil each.
What has happened to the Total Net Assets of these 81 Non-Catholic, Non-Profit Hospital Organizations during the Obama Administration so far?
Well, even better than what happened with the Catholic Hospitals, whose Total Net Assets grew by 42%.
The Non-Catholic, Non-Profit Hospitals had their Total Net Assets Increase by a higher 49% during the Obama Administration.
Their Total Net Assets at the most recent reported balance sheet date, or at March 2012 for the overwhelming majority of them, were $185 bil, or an increase of $61 bil in roughly the most recent three years. Whew!
Clearly, the executives, employees, retirees, Board of Directors, and Bondholders of these Non-Catholic, Non-Profit Hospital Organizations have to all be just elated with what has happened with the financial strength of their Hospitals during the Obama Administration.
And frankly, so should hospital patients, US businesses, and US taxpayers.
Why? Because if the Obama Administration had not completely rescued these Non-Profit Hospitals, the US health care cost curve would have sloped substantially upward, with resultant massively higher hospital patient fees, higher health insurance premiums, and higher Medicare and Medicaid costs.
And also frankly, how in the world could the US Supreme Court be in a position of making a sufficiently reasoned ruling on health insurance mandates and perhaps even on whether the Affordable Care Act should be overthrown, when they couldn't possibly have the necessary understanding on the finances of Non-Profit Hospitals, which is both so complicated and also so critical to the viability of the entire US Health Care System.
And it's pretty clear that the US Congress doesn't have the requisite understanding of the financial aspects of the US Health Care System.
The only part of the US Government that does is the Obama Administration, working in conjunction with the Fed.
Below here are these 81 Non-Catholic, Non-Profit Hospital Organizations, along with their Net Asset Amounts at the Most Recently Reported Balance Sheet Date and at the Fiscal Year Ended (FYE) closest to Three Years Earlier, thus roughly during the most recent three years of the Obama Administration.
| Most | Three | Three | Obama | Obama | |||
| Recent | Years | Years | Bump | Bump | |||
| Most | Balance | Earlier | Earlier | Net | Net | ||
| Recent | Sheet | FYE | FYE | Assets | Assets | ||
| Balance | Net | Balance | Net | Increase | Increase | ||
| Sheet | Assets | Sheet | Assets | Amount | % | ||
| Hospital Organization | HQs | Date | mils $s | Date | mils $s | mils $s | |
| Kaiser Permanente | Oakland, CA | Mar 12 | 13,995 | Dec 08 | 11,431 | 2,564 | 22% |
| Sutter Health | Sacramento, CA | Mar 12 | 6,882 | Dec 08 | 4,298 | 2,584 | 60% |
| Partners Healthcare System | Boston, MA | Mar 12 | 5,888 | Sep 09 | 4,975 | 913 | 18% |
| Adventist Health System | Winter Park, FL | Dec 11 | 5,146 | Dec 08 | 3,407 | 1,739 | 51% |
| Mayo Clinic | Rochester, MN | Mar 12 | 5,032 | Dec 08 | 2,326 | 2,706 | 116% |
| Cleveland Clinic Health System | Cleveland, OH | Mar 12 | 4,711 | Dec 08 | 2,715 | 1,996 | 74% |
| UPMC | Pittsburgh, PA | Mar 12 | 4,305 | Jun 09 | 2,756 | 1,549 | 56% |
| BJC HealthCare | St Louis, MO | Mar 12 | 4,293 | Dec 08 | 2,705 | 1,588 | 59% |
| Memorial Sloan-Kettering Cancer Center | NY, NY | Mar 12 | 4,114 | Dec 08 | 3,224 | 890 | 28% |
| Advocate HealthCare Network | Oak Brook, IL | Mar 12 | 3,808 | Dec 08 | 1,842 | 1,966 | 107% |
| The Methodist Hospital System | Houston, TX | Mar 12 | 3,658 | Dec 08 | 2,375 | 1,283 | 54% |
| NY and Presbyterian Hospital | NY, NY | Mar 12 | 3,373 | Dec 08 | 2,333 | 1,040 | 45% |
| Banner Health | Phoenix, AZ | Mar 12 | 3,258 | Dec 08 | 1,669 | 1,589 | 95% |
| Inova Health System | Northern VA | Mar 12 | 3,243 | Dec 08 | 1,885 | 1,358 | 72% |
| Johns Hopkins Health System | Baltimore, MD | Mar 12 | 3,234 | Jun 09 | 1,273 | 1,961 | 154% |
| Children's Medical Center Boston | Boston, MA | Mar 12 | 3,204 | Sep 09 | 2,516 | 688 | 27% |
| Indiana University Health | Indianapolis, IN | Mar 12 | 3,003 | Dec 08 | 1,434 | 1,569 | 109% |
| Baylor Health Care System | Dallas, TX | Mar 12 | 2,991 | Jun 09 | 2,166 | 825 | 38% |
| Texas Health Resources | Dallas, TX | Mar 12 | 2,964 | Dec 08 | 1,921 | 1,043 | 54% |
| Carolinas Health Care System | Charlotte, NC | Dec 11 | 2,911 | Dec 08 | 2,087 | 824 | 39% |
| Northwestern Memorial Health Care | Chicago, IL | Feb 12 | 2,623 | Aug 09 | 1,642 | 981 | 60% |
| Texas Children's Hospital | Houston, TX | Mar 12 | 2,591 | Sep 09 | 2,088 | 503 | 24% |
| Baycare Health System | Tampa, FL | Mar 12 | 2,571 | Dec 08 | 1,523 | 1,048 | 69% |
| Sentara Health Care | Norfolk, VA | Mar 12 | 2,565 | Dec 08 | 1,489 | 1,076 | 72% |
| Jefferson Health System | Radnor, PA | Mar 12 | 2,491 | Jun 09 | 1,860 | 631 | 34% |
| Children's Hospital Philadelphia | Philadelphia, PA | Dec 11 | 2,471 | Jun 09 | 1,938 | 533 | 28% |
| Children's Healthcare of Atlanta | Atlanta, GA | Mar 12 | 2,347 | Dec 08 | 1,482 | 865 | 58% |
| Baptist Health South Florida | Miami, FL | Mar 12 | 2,243 | Sep 09 | 1,571 | 672 | 43% |
| OhioHealth | Columbus, OH | Mar 12 | 2,188 | Jun 09 | 1,259 | 929 | 74% |
| NorthShore Long Island Jewish Health | NY, NY | Mar 12 | 2,167 | Dec 08 | 614 | 1,553 | 253% |
| Duke University Health System | Durham, NC | Mar 12 | 2,147 | Jun 09 | 1,392 | 755 | 54% |
| Scripps Health | San Diego, CA | Mar 12 | 2,081 | Sep 09 | 1,354 | 727 | 54% |
| Memorial Hermann Healthcare System | Houston, TX | Mar 12 | 2,009 | Jun 09 | 1,509 | 500 | 33% |
| Novant Health | Winston-Salem, NC | Mar 12 | 1,957 | Dec 08 | 1,557 | 400 | 26% |
| Oregon Health & Science University | Portland, OR | Mar 12 | 1,926 | Jun 09 | 1,570 | 356 | 23% |
| Iowa Health System | Des Moines, IA | Mar 12 | 1,845 | Dec 08 | 1,067 | 778 | 73% |
| University Penn Health System | Philadelphia | Mar 12 | 1,826 | Jun 09 | 1,163 | 663 | 57% |
| Baptist Memorial Health Care | Memphis, TN | Mar 12 | 1,816 | Sep 09 | 1,501 | 315 | 21% |
| NorthShore University Health Systems | Evanston, IL | Mar 12 | 1,732 | Sep 09 | 1,443 | 289 | 20% |
| Geisinger Health System | Danville, PA | Mar 12 | 1,706 | Jun 09 | 901 | 805 | 89% |
| Sanford | Sioux Falls, SD | Mar 12 | 1,699 | Jun 09 | 1,242 | 457 | 37% |
| Spectrum Health System | Grand Rapids, MI | Mar 12 | 1,569 | Jun 09 | 1,128 | 441 | 39% |
| ProMedica Health Care | Toledo, OH | Dec 11 | 1,535 | Dec 08 | 1,042 | 493 | 47% |
| Rush University Medical Center | Chicago, IL | Mar 12 | 1,506 | Jun 09 | 1,073 | 433 | 40% |
| Stanford Hospital & Clinics | Palo Alto, CA | Feb 12 | 1,495 | Aug 09 | 807 | 688 | 85% |
| Allina Health System | Minneapolis, MN | Mar 12 | 1,491 | Dec 08 | 804 | 687 | 85% |
| Seattle Children's Healthcare | Seattle, WA | Mar 12 | 1,488 | Sep 09 | 1,195 | 293 | 25% |
| Adventist Health West | Roseville, CA | Mar 12 | 1,400 | Dec 08 | 969 | 431 | 44% |
| University Hospitals Health System | Cleveland, OH | Mar 12 | 1,392 | Dec 08 | 1,078 | 314 | 29% |
| Christiana Care Health Services | Wilmington, DE | Mar 12 | 1,392 | Jun 09 | 881 | 511 | 58% |
| Henry Ford Health System | Detroit, MI | Mar 12 | 1,386 | Dec 08 | 1,053 | 333 | 32% |
| LifeSpan | Providence, RI | Mar 12 | 1,368 | Sep 09 | 1,225 | 143 | 12% |
| Premier Health Partners | Dayton, OH | Dec 11 | 1,330 | Dec 08 | 1,111 | 219 | 20% |
| Sharp Health Care | San Diego, CA | Mar 12 | 1,330 | Sep 09 | 806 | 524 | 65% |
| South Broward Hospital District | Hollywood, FL | Jan 12 | 1,322 | Apr 09 | 1,011 | 311 | 31% |
| Children's Memorial Medical Center | Chicago, IL | Feb 12 | 1,322 | Aug 09 | 1,051 | 271 | 26% |
| Nationwide Children's Hospital | Columbus, OH | Mar 12 | 1,319 | Dec 08 | 761 | 558 | 73% |
| Children's Medical Center of Dallas | Dallas, TX | Mar 12 | 1,313 | Dec 08 | 821 | 492 | 60% |
| Cook Children's Health | Dallas, TX | Mar 12 | 1,303 | Sep 09 | 840 | 463 | 55% |
| University Maryland Medical System | Baltimore, MD | Mar 12 | 1,301 | Jun 09 | 904 | 397 | 44% |
| Presbyterian Health Care Services | New Mexico | Mar 12 | 1,291 | Dec 08 | 706 | 585 | 83% |
| CareGroup Health Care System | Boston, MA | Mar 12 | 1,254 | Sep 09 | 978 | 276 | 28% |
| Fairview Health Services | Minneapolis, MN | Mar 12 | 1,192 | Dec 08 | 732 | 460 | 63% |
| Multicare Health System | Tacoma, WA | Mar 12 | 1,183 | Dec 08 | 650 | 533 | 82% |
| John Muir Health | Walnut Creek, CA | Mar 12 | 1,164 | Dec 08 | 756 | 408 | 54% |
| University of Chicago Medical Center | Chicago, IL | Mar 12 | 1,154 | Jun 09 | 823 | 331 | 40% |
| Froedtert Health | Milwaukee, WI | Mar 12 | 1,138 | Jun 09 | 824 | 314 | 38% |
| Orlando Health | Orlando, FL | Mar 12 | 1,136 | Sep 09 | 875 | 261 | 30% |
| Virginia Commonwealth University Health | Richmond, VA | Mar 12 | 1,115 | Jun 09 | 756 | 359 | 47% |
| Medical College of Wisconsin | Milwaukee, WI | Mar 12 | 1,112 | Jun 09 | 808 | 304 | 38% |
| Wellstar Health System | Marietta, GA | Mar 12 | 1,102 | Jun 09 | 715 | 387 | 54% |
| Cone Health | Greensboro, NC | Mar 12 | 1,076 | Sep 09 | 894 | 182 | 20% |
| Mission Health System | Asheville, NC | Mar 12 | 1,071 | Sep 09 | 882 | 189 | 21% |
| MedStar Health | Columbia, MD | Mar 12 | 1,054 | Jun 09 | 647 | 407 | 63% |
| St Luke's Episcopal Health System | Houston, TX | Mar 12 | 1,053 | Dec 08 | 692 | 361 | 52% |
| Children's Hospital Colorado | Denver, CO | Mar 12 | 1,043 | Dec 08 | 678 | 365 | 54% |
| Alegent Health | Omaha, NE | Mar 12 | 1,030 | Jun 09 | 835 | 195 | 23% |
| Children's Hospital Los Angeles | Los Angeles, CA | Mar 12 | 1,028 | Jun 09 | 758 | 270 | 36% |
| Lehigh Vallley Health Network | Allentown, PA | Mar 12 | 1,028 | Jun 09 | 590 | 438 | 74% |
| North Carolina Baptist Hospital | Winston-Salem, NC | Mar 12 | 1,016 | Jun 09 | 715 | 301 | 42% |
| Nemours Foundation | Jacksonville, FL | Dec 11 | 1,008 | Dec 08 | 744 | 264 | 35% |
| Total all 81 Hospital Organizations | 184,824 | 124,121 | 60,703 | 49% |
Yeah, that's correct, these 81 Non-Catholic, Non-Profit Hospital Organizations had their Total Net Assets, the salient measure of their financial strength, grow by more more than $60 bil, or by a massive 49%, in the span of the Obama Administration so far. And all 81 of them had at least double-digit percentage increases in their Total Net Assets during the Obama Administration, with the lowest increase being 12%.
And below here, from a quick review, are 12 other Non-Catholic, Non-Profit Hospital Organizations which had Total Net Assets of more than $1 bil, but did not have very recent disclosures of their Total Net Assets, and thus the change in their Total Net Assets was only for mostly just Two Years.
| Most | Two | Two | Obama | Obama | |||
| Recent | Years | Years | Bump | Bump | |||
| Most | Balance | Earlier | Earlier | Net | Net | ||
| Recent | Sheet | FYE | FYE | Assets | Assets | ||
| Balance | Net | Balance | Net | Increase | Increase | ||
| Sheet | Assets | Sheet | Assets | Amount | % | ||
| HQs | Date | mils $s | Date | mils $s | mils $s | ||
| Hospitals with Two Year Net Asset Changes | |||||||
St. Jude Children's Research Hospital | Memphis, TN | Jun 11 | 2,542 | Jun 09 | 1,907 | 635 | 33% |
| Cedars-Sinai Medical Center | Los Angeles, CA | Jun 11 | 1,997 | Jun 09 | 1,517 | 480 | 32% |
| University of Michigan Hospitals & Health Sciences | Ann Arbor, MI | Jun 11 | 1,751 | Jun 09 | 1,537 | 214 | 14% |
| UCLA Medical Center | Los Angeles, CA | Jun 11 | 1,715 | Jun 09 | 1,350 | 365 | 27% |
| University of North Carolina Healthcare System | Chapel, NC | Jun 11 | 1,694 | Jun 09 | 1,327 | 367 | 28% |
| NYU Langone Medical Center | NY, NY | Aug 11 | 1,584 | Aug 09 | 1,277 | 307 | 24% |
| Children's Hospital Cincinnati | Cincinnati, OH | Jun 11 | 1,534 | Jun 09 | 1,140 | 394 | 35% |
| Hoag Memorial Hospital Presbyterian | Newport Beach, CA | Sep 11 | 1,499 | Sep 09 | 1,375 | 124 | 9% |
| Packard Children's Hospital | Palo Alto, CA | Aug 11 | 1,243 | Aug 09 | 1,068 | 175 | 16% |
| Dallas County Hospital District (Parkland) | Dallas, TX | Dec 11 | 1,187 | Sep 09 | 962 | 225 | 23% |
| University California San Francisco | San Fran, CA | Jun 11 | 1,124 | Jun 09 | 761 | 363 | 48% |
| University of Iowa Hospitals & Clinics | Iowa City, IA | Jun 11 | 1,107 | Jun 09 | 969 | 138 | 14% |
| Total all 12 | 18,977 | 15,190 | 3,787 | 25% | |||
