Tuesday, February 26, 2013

US Debt Reduction Sequester Spending Solution #17: Cut US Government Subsidies to Teaching Hospitals

In a recent study of 53 of the largest US Non-Profit Hospital Organizations, and a related post on it that I made, below here are the 10 with the highest Hospital Operating Income as a Percentage of Total Operating Revenues.




Current


Year


Hospital


Operating


Income Current


Divided By Year


Total Hospital


Operating Operating


Revenues Income



mil $s
UCLA Medical Center CA 15.93% 274
NYU Hospitals Center NY 12.52% 249
Shands Teaching Hospital & Clinics FL 10.50% 114
University North Carolina Hospital Chapel Hill NC 10.21% 121
Duke University Health System NC 9.60% 238
OhioHealth OH 9.27% 229
Baptist Health South Florida FL 9.24% 213
University Chicago Medical Center IL 9.22% 119
University California San Francisco CA 9.21% 174
Scripps Health CA 9.09% 233

When you look at the above list, the thing that sticks out is that 7 of the top 10 are Teaching Hospitals.

A key reason why 7 of the top 10 with the highest Hospital Operating Income as Percentage of Total Operating Revenues are Teaching Hospitals is that the US Government gives substantial subsidies to these Teaching Non-Profit Hospitals.

Many companies in the private sector would just love to have a bottom line Net Income as a Percentage of Total Operating Revenues of 9.00%.  There are so many that don't.

My recommendation here is for the US Government to significantly reduce the annual subsidies that it gives to Teaching Hospitals.  This is a much fairer way to reduce US Government Spending than to cut Medicare, Medicaid and Social Security Benefits.