HCA, the for-profit, publicly-held hospital giant generated annual 2012 Core Adjusted Pretax Income of a massive $3,054 mil, up a very robust 19% from the $2,559 mil earned in 2011.
And on an after-tax basis, HCA's Core Adjusted Net Income in 2012 increased by a higher 21% over 2011.
In addition, HCA's Core Adjusted Earnings Per Share of $3.71 in 2012 increased by an even higher 30% over the $2.85 earned in 2011, with 7% fewer common shares outstanding in 2012 being a major help here.
This 19% annual pretax earnings increase more than doubled the 9% increase in Revenues in annual 2012.
But it gets much better, from a long-term perspective.
Included as an earnings charge in HCA's 2012 Pretax Income of $3,054 mil was an even larger Provision for Doubtful Accounts of $3,770 mil. In comparison, a much lower $2,824 mil of Provision for Doubtful Accounts was included as an earnings charge in HCA's 2011 Pretax Income of $2,559 mil.
So, the Pretax Income before Provision for Doubtful Accounts was $6,824 mil in 2012, up an even more robust 27% from the $5,383 mil like earnings in 2011.
This Provision for Doubtful Accounts is just huge in the Affordable Care Act (ACA).
When the ACA totally kicks in during 2014 and 2015, the Provision for Doubtful Accounts of all hospitals will drop dramatically, since many of the uninsured will then be insured, and many of the underinsured will then be better insured.
To illustrate the major impact here, let's say that with the ACA, the decrease in the Provision for Doubtful Accounts were to drop by 50%. Then, HCA's 2012 Pretax Income would have increased from the $3,054 mil reported to $4,939 mil as adjusted for the $1,885 mil or 50% reduction in the Provision for Doubtful Accounts of $3,770 mil.
In addition, when the ACA totally kicks in, HCA would get an earnings increase from a portion of the current charity care revenue it presently foregoes, due to many of the uninsured then being insured.
I think that the CBO has substantially overstated US Government health care costs in the next 10 years, and many years thereafter, under the ACA.
To illustrate this point, the CBO just very recently corrected for its over $300 bil overestimate in US Government health care costs over the next 10 years, due to the annual actual health care cost increase being 5% lower so far from what the CBO earlier projected. This is extremely good news for the country's huge debt and also good news for the effectiveness of the ACA in substantially reducing health care costs.
When hospital earnings are high, and increasing very robustly like they are, the end result will be that what the hospital charges patients will ultimately be reduced, and thus US Government Medicare and Medicaid costs will also be markedly reduced. The many Obamacare dissidents have totally missed this salient point.
These hospital earnings are higher because ACA has caused many hospital administrators and other health care experts to undercover many wise ways to reduce the costs in the delivery of health care, and to do so without reducing the quality of health care by one iota.
