Back in June 2012, I made two posts related to the incredible growth of the key financial strength measure of Net Assets of the country's largest Non-Profit Hospitals.
The first of these two posts showed that I found 22 Catholic, Non-Profit Hospital Organiziations with Net Assets (i.e. Excess of Total Assets over
Total Liabilities) of more than $800 mil each.
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, which was 21.0 bil, or 42%, higher than the $49.3 bil of Total Net Assets at their
respective fiscal year ends (FYEs) of the closest date to three years
earlier, thus during the Obama Administration.
US Catholic Hospital Net Assets Up 42% During Obama Administration
And the second of these two posts showed that I found 81 Non-Catholic, Non-Profit Hospitals with Net Assets of more than $1 bil each.
These 81 Non-Catholic, Non-Profit Hospital Organizations had Total Net Assets of $184.8
bil at the most recent reported balance sheet date, which was March
31, 2012 for most of them, which was 60.7 bil, or 49%, higher than the $124.1 bil of Total Net Assets at their
respective fiscal year ends (FYEs) of the closest date to three years
earlier, thus during the Obama Administration.
US Big Non-Catholic, Non-Profit Hospital Net Assets Up 49% During Obama Administration
When you think about it, that Net Asset growth of 42% for the Big Catholic Hospitals and of an even higher 49% for the Non-Catholic, Non-Profit Hospitals 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 investment returns, since the inception of the
hospital organizations, which were many decades for most of them.
And these two posts also showed the Obama Administration's role in this massive Net Asset growth of these Non-Profit Hospitals.
Further, these Non-Profit Hospitals, with this substantially enhanced financial strength, are now able to borrow much more cheaply, and also to refinance their existing higher interest rate debt.
With the new Affordable Health Care Act, these Non-Profit Hospitals will be substantially increasing their Patient Service Revenues in 2014, when this Act totally kicks in.
Also, with the new Affordable Health Care Act, these Non-Profit Hospitals will be dramatically reducing their huge amounts of Patient Bad Debt Expense and also their huge amounts of Charity Care Costs.
Thus, even after the massive increase in Total Net Assets in the most recent three years, these Non-Profit Hospitals will be dramatically increasing their Hospital Operating Income, and thus their Net Assets even further annually starting in 2014.
And in another recent post, I showed how For-Profit Hospital giant HCA has generated back-to-back ongoing, core pretax earnings increases of 29% and 28% in the most recent two quarters. Further, HCA's Net Income under US Generally Accepted Accounting Principles in the most recent 3Q 2012 was up 490% over the prior year's quarter. And HCA's Earnings Per Share was up an even greater 609%, due to its massive stock buyback program.
There has been a massive transfer of wealth from US citizen patients, from US businesses, and from US and State Governments to US Hospitals over the past decade. And what happened to a good chunk of this transfer of wealth? It is sitting as Investments in Common Stock and Investments in Debt on US Non-Profit Hospital balance sheets, where it is allowed to accumulate further, tax free.
And in any reasonable projection of future Hospital Operating Profits and Hospital Investment Returns, this already huge treasure chest of Non-Profit Hospital Net Assets will grow further by leaps and bounds, particularly starting in 2014, when the new Health Care Plan totally kicks in.
In solving the US Fiscal Cliff and the US Debt Grand Bargain, is it fair for retirees to have their Medicare benefits cut, while these Non-Profit Hospital Net Assets are allowed to continue to grow to the moon? I don't think so. That's clearly not playing fair.
And should tax-free US Non-Profit Hospitals be allowed to spend just tons of money on lobbying and on television advertisements, when this money could be spent much more wisely for everyone's benefit by reducing Patient Service Fees?
I think US Non-Profit Hospitals should be ponying in a substantial amount of money, by a fair, healthy reduction in patient service fees and other wise measures, in order to help solve the US Fiscal Cliff and the US Debt Grand Bargain.
