California Non-Profit Hospitals Net Assets Up 57% Under Obama and the Affordable Care Act

From a review of the Electronic Municipal Market Access (EMMA), I found a just huge number of 34 Non-Profit Hospital Organizations headquartered in the State of California with Net Assets at the most recent date reported of more than $400 mil each.  Below here are the Net Assets of these 34 at both the most recent reported date and also at the beginning of the Obama Administration:

						2008	2008	Obama
				Most		or	or	ACA
			Most	Recent		2009	2009	and
			Recent	Balance		FYE	Balance	US Fed
			Balance	Sheet		Balance	Sheet	Bump
	City	State	Sheet	Net		Sheet	Net	%
Hospital Organization	HQs	HQs	Date	Assets		Date	Assets	Change
				mil $s			mil $s
Kaiser Permanente	Oakland	CA	Jun 13	15,747		Dec 08	11,431	38%
Sutter Health	Sacramento	CA	Jun 13	7,485		Dec 08	4,298	74%
Dignity Health	San Francisco	CA	Jun 13	6,061		Jun 09	3,622	67%
St Joseph Health System	Orange	CA	Jun 13	4,964		Jun 09	2,076	139%
Scripps Health	San Diego	CA	Jun 13	2,507		Sep 09	1,354	85%
Stanford Hospitals & Clinics	Stanford	CA	May 13	2,099		Aug 09	807	160%
Cedars-Sinai Medical Center	West Hollywood	CA	Jun 12	2,058		Jun 09	1,517	36%
City of Hope	Duarte	CA	Jun 13	1,928		Sep 09	1,211	59%
U Cal, LA Medical Center	Los Angeles	CA	Jun 12	1,826		Jun 09	1,350	35%
Memorial Health Services	Fountain Valley	CA	Jun 13	1,809		Jun 09	955	89%
Sharp HealthCare	San Diego	CA	Jun 13	1,702		Sep 09	806	111%
Packard Children's Hospital	Palo Alto	CA	May 13	1,661		Aug 09	1,068	56%
Hoag Memorial Hospital	Newport Beach	CA	Sep 12	1,653		Sep 09	1,375	20%
Adventist Health West	Roseville	CA	Jun 13	1,559		Dec 08	969	61%
John Muir Health	Walnut Creek	CA	Jun 13	1,328		Dec 08	756	76%
U Cal, San Fran Medical Center	San Francisco	CA	Jun 12	1,169		Jun 09	761	54%
Children's Hospital Los Angeles	Los Angeles	CA	Jun 13	1,124		Jun 09	758	48%
Cottage Health System	Santa Barbara	CA	Jun 13	1,070		Dec 08	675	59%
U Cal, Davis Medical Center	Sacramento	CA	Jun 12	1,022		Jun 09	794	29%
El Camino Hospital	Mountain View	CA	Jun 13	980		Jun 09	685	43%
U Cal, San Diego Medical Center	San Diego	CA	Jun 12	859		Jun 09	569	51%
Rady Children's Hospital	San Diego	CA	Jun 13	832		Jun 09	387	115%
Community Medical Centers	Fresno	CA	May 13	717		Aug 09	390	84%
Huntington Memorial Hospital	Pasadena	CA	Jun 13	670		Dec 08	446	50%
Children's Hospital Central Calif	Madera	CA	Jun 13	657		Sep 09	281	134%
Loma Linda Univ Medical Center	Loma Linda	CA	Jun 13	646		Dec 08	415	56%
U Cal, Irvine Medical Center	Orange	CA	Jun 12	605		Jun 09	631	-4%
Community Hospital Foundation	Monterey	CA	Jun 13	513		Dec 08	341	50%
Children's Hospital Orange County	Orange	CA	Mar 13	509		Jun 09	412	24%
PIH Health	Whittier	CA	Jun 13	506		Sep 09	400	27%
Torrance Memorial Med Center	Torrance	CA	Jun 13	458		Dec 08	302	52%
Fremont-Rideout Health Group	Yuba City	CA	Mar 13	424		Jun 09	313	35%
Washington Hospital Healthcare	Fremont	CA	Mar 13	413		Jun 09	300	38%
Eisenhower Medical Center	Rancho Mirage	CA	Jun 13	410		Jun 09	515	-20%
Total all 34				67,971			42,970	58%

As you can see from the above chart, the Total Net Assets of these 34 California Non-Profit Hospital Organizations increased by a very robust 58% to $67.971 bil during the Obama Administration.  This is particularly noteworthy since this 58% total Net Asset growth was over an average of only 3.79 years.

A review of the gigantic, very well run Kaiser Permanente's (KP) Statements of Operations in the past 5 1/2 years provides an excellent insight into the Non-Profit Hospital sector.

The financial meltdown occurring in the last part of 2008 caused KP to report a Net Loss of $794 mil in annual 2008.  In 2009, KP reversed course by recording a Net Income of $2.109 bil.  Reviewing its income components, KP generated a Non-Operating Investment Loss of $2.237 bil in 2008 as contrasted to a Non-Operating Investment Income of $649 mil in 2009.

Then KP's annual income stabilized in 2009 through 2011, ranging from $2.0 bil to $2.1 bil.

Subsequent to 2011, KP's Earnings have really perked up, increasing from $2.013 bil in annual 2011 to $2.596 bil in annual 2012, up a very impressive 29%.  And in the most recent first half of 2013, KP's Net Income increased by another 18% over the first half of 2012.

For the most recent 4.5 years ended June 30, 2013, KP generated Total Bottom Line Profit of a massive $10.230 bil, a seemingly very fair 4.8% of its Total Revenues over the same time span.

Sutter Health's 74% Net Asset growth during the Obama Administration was driven predominately by its very healthy Income (Revenues over Expenses), which totaled a massive $3.233 bil for the most recent 4.5 years ended June 30, 2013, which was a high 8.0% of its Total Revenues.

Dignity Health's most recent fiscal year end Bottom Line Profit of $812 mil was an off-the-charts 502% increase over the previous fiscal year.  It's all about Non-Operating Investment Income changes.  For the most recent four years, its Total Non-Operating Investment Income was $1.723 bil, which comprised a monstrous 73% of its Total Bottom Line Profits.  And this Total Bottom Line Profits of a massive $2.350 bil was 6.1% of its Total Revenues over that same four year period. 

St Joseph Health System reported a massive Bottom Line Profit of $1.922 bil in the most recent fiscal year June 2013, with $1.7 bil of this Profit being derived from an affiliation with Newport Beach, CA-based Hoag Memorial.  The upfront income accounting here works similarly to bargain gains on business acquisitions in the private sector.

Exclusive of that $1.7 bil acquisition gain, St Joseph Health System generated Total Bottom Line Profits of $965 mil in the most recent four years, which was a seemingly reasonable 5.5% of its Total Revenues over the same time span.

In the most recent 3.75 years, Scripps Health generated Total Bottom Line Profits of $1.072 bil, which was a huge 11.7% of its Total Revenues.  This 11.7% Bottom Line Profit Margin exceeded that of more than half of the 30 Dow Industrials.  And the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies is a much lower 9.6% of their Total Revenues.  Is that fair?  Not even close to being fair.

Stanford Hospital & Clinics' huge 160% Net Asset gain is particularly impressive given that it was generated over only a 3.75 year period.  In the most recent 3.75 years, Stanford Hospital & Clinics generated Total Bottom Line Income of $931 mil, a very high 11.0% of its Total Revenues.  This 11.0% Bottom Line Profit Margin Percentage exceeds that of more than half of the 30 Dow Industrial companies.  Does that make any sense?  No way.

Duarte, CA-based City of Hope has experienced a very robust 59% increase in its Net Assets during the Obama Administration.  In the most recent 1.75 years, City of Hope generated Total Bottom Line Profits of $494 mil, which was an incredibly high 22.3% of its Total Revenues.

Cedars-Sinai Medical Center generated Total Bottom Line Profits of $557 mil in the most recently reported three years ended June 30, 2012, which was a high 7.6% of its Total Revenues over the same time period.

Sharp HealthCare's Total Bottom Line Profits were $854 mil in the most recent 3.75 years ended June 30, 2013, which was a very high 9.2% of its Total Revenues over the same time period, just short of the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies of 9.6% of their Total Revenues.  Is that fair?  Not even close to being fair.

Hoag Memorial Hospital generated Total Bottom Line Profits of $289 mil in the most recently reported 3.5 years ended March 31, 2013, which was a very high 9.5% of its Total Revenues over the same time period, just short of the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies of 9.6% of their Total Revenues.

Adventist Health West's Total Bottom Line Profits were $523 mil in the most recent 4.5 years ended June 30, 2013, which was a very reasonable 4.4% of its Total Revenues over the same time period.  

Fountain Valley-headquartered Memorial Health Services generated Total Bottom Line Profits of $630 mil in the most recently reported four years ended June 30, 2013, which was a very high 9.0% of its Total Revenues over the same time period.

Walnut Creek-based John Muir Health's Total Bottom Line Profits were $485 mil in the most recent 4.5 years ended June 30, 2013, which was a high 7.7% of its Total Revenues over the same time period.

Santa Barbara-based Cottage Health System generated Total Bottom Line Profits of $398 mil in the most recently reported 4.5 years ended June 30, 2013, which was an exceptionally high 15.2% of its Total Revenues over the same time period.  Is this fair?  There's no way it is.

University of California Medical Centers

University of California, Los Angeles Medical Center generated Total Bottom Line Profits of $694 mil in the most recently reported three years ended June 30, 2012, which was an exceptionally high 13.5% of its Total Revenues over the same time period.
 
University of California, San Diego Medical Center generated Total Bottom Line Profits of $352 mil in the most recently reported three years ended June 30, 2012, which was an exceptionally high 12.3% of its Total Revenues over the same time period.

University of California, San Francisco Medical Center generated Total Bottom Line Profits of $457 mil in the most recently reported three years ended June 30, 2012, which was a high 8.1% of its Total Revenues over the same time period.

University of California, Irvine Medical Center generated Total Bottom Line Profits of $166 mil in the most recently reported three years ended June 30, 2012, which was also a high 8.1% of its Total Revenues over the same time period.

University of California, Davis Medical Center generated Total Bottom Line Profits of $222 mil in the most recently reported three years ended June 30, 2012, which was 6.0% of its Total Revenues over the same time period.

California Children's Hospitals

Madera-based Children's Hospital of Central California generated Total Bottom Line Profits of $342 mil in the most recently reported 3.75 years ended June 30, 2013, which was an exceptionally high 18.5% of its Total Revenues over the same time period.

Packard Children's Hospital at Stanford generated Total Bottom Line Profits of $517 mil in the most recently reported 3.75 years ended May 31, 2013, which was a very high 14.6% of its Total Revenues over the same time period.


San Diego-based Rady Children's Hospital and Health Center generated Total Bottom Line Profits of $382 mil in the most recently reported four years ended June 30, 2013, which was a very high 13.0% of its Total Revenues over the same time period.

Children's Health Care of Orange County generated Total Bottom Line Profits of $125 mil in the most recently reported three years ended June 30, 2012, which was a high 8.2% of its Total Revenues over the same time period.

And lastly, Children's Hospital Los Angeles generated Total Bottom Line Profits of $211 mil in the most recently reported four years ended June 30, 2013, which was a high 6.9% of its Total Revenues over the same time period.

When you review the high Total Bottom Line Profit Margins for so many of the above Non-Profit Organizations, you have to wonder just how did the country get here where so many incredibly greedy Hospital executives charge just unbelievably high patient fees.  I think it is mainly due to nearly all in the US Congress and also those in State legislatures on both sides of the aisle valuing their Hospitals in their States over the citizens of their State.  The Hospital lobby is just too strong and it has been one of the main causes of why US total health care costs have been so incredibly high over the years.

We have all of these so-called Deficit Hawks in the US Congress and they see nothing wrong with shutting down the US Government and also imposing these massive across-the-board sequester cost cuts, both for the sake of Deficit Reduction, and at the same time they also see nothing wrong with so many US Non-Profit Hospital Organization generating Bottom Line Profit Margins far in excess of the country's very best companies in the private sector.  It clearly tells you why the US Congress as a whole now has an approval rating of only 5%.

Very positively impacting this major increase in the Net Assets (Financial Strength) of these hospitals were actions taken by both the Obama Administration and the US Fed to strengthen the US Financial Foundation which was severely damaged from the financial meltdown in late 2008.

In addition, the Affordable Care Act (ACA) has also played a key role in this increase in Net Assets (Financial Strength) of these Non-Profit Hospital Organizations.

A remarkable thing is that these robust increases in Net Assets of these Non-Profit Hospital Organizations occurred when these Non-Profit Hospitals were also able to substantially bend down the Total US Health Care Cost Curve in each of the most recent three years.

With future Non-Profit Hospital Organizations' Hospital Operating Income being bolstered by both many of the Uninsured getting insurance and by the many of the Underinsured getting much better insurance, both under the ACA,  future Net Asset growth of these Non-Profit Hospital Organizations should be even substantially more robust, especially for States choosing to expand Medicaid.