| 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 | |||||||
| Advocate HealthCare Network | Oak Brook | IL | Jun 13 | 4,662 | Dec 08 | 1,842 | 153% | |
| Northwestern Memorial Health Care | Chicago | IL | May 13 | 2,915 | Aug 09 | 1,642 | 78% | |
| Hospital Sisters Health System | Springfield | IL | Jun 13 | 2,252 | Jun 09 | 1,697 | 33% | |
| NorthShore University Health System | Evanston | IL | Jun 13 | 1,939 | Sep 09 | 1,443 | 34% | |
| Rush University Medical Center | Chicago | IL | Jun 13 | 1,734 | Jun 09 | 1,073 | 62% | |
| Cadence Health | Winfield | IL | Mar 13 | 1,696 | Jun 09 | 879 | 93% | |
| Children's Memorial Chicago Med Center | Chicago | IL | May 13 | 1,394 | Aug 09 | 1,051 | 33% | |
| University Chicago Medical Center | Chicago | IL | Mar 13 | 1,201 | Jun 09 | 823 | 46% | |
| OSF Healthcare System | Peoria | IL | Jun 13 | 822 | Sep 09 | 684 | 20% | |
| St George | Palos Heights | IL | Jun 13 | 803 | Dec 08 | 491 | 64% | |
| Presence Health | Chicago | IL | Jun 13 | 851 | Dec 11 | 713 | 19% | |
| Edward Health Services | Naperville | IL | Mar 13 | 603 | Jun 09 | 369 | 63% | |
| Memorial Health System | Springfield | IL | Jun 13 | 576 | Sep 09 | 415 | 39% | |
| Little Company Mary Hosps&Healthcare | Evergreen | IL | Mar 13 | 511 | Jun 09 | 310 | 65% | |
| Northwest Community Healthcare | Arlington Heights | IL | Jun 13 | 508 | Sep 09 | 462 | 10% | |
| Resurrection Health | Chicago | IL | Dec 11 | 497 | Jun 09 | 444 | 12% | |
| Alexian Brothers Health System | Arlington Heights | IL | Jun 13 | 440 | Dec 09 | 422 | 4% | |
| Total all 17 | 23,404 | 14,760 | 59% |
As you can see from the above chart, the Total Net Assets of these 17 Illinois Non-Profit Hospital Organizations increased by a very robust 59% to $23.404 bil during the Obama Administration.
I think reviewing what has happened with the very well run, huge Advocate Health Care Network during the Obama Administration is very helpful since similar things have been going on all throughout the Non-Profit Hospital sector. I know this hospital organization since my older daughter was born in one of its hospitals and the family dropped quite a few bucks there in patient fees over the years.
Net Assets are the excess of Total Assets over Total Liabilities at any point in time. Net Assets of a Non-Profit Hospital Organization is the signal measure of its Financial Strength.
By far the dominant cause of the Net Asset change is the Bottom Line Profit, or the Excess of Total Revenues over Total Expenses. In Advocate Health Care's case, its Net Assets were $1.842 bil at December 31, 2008, which grew by $2.820 bil, or by a massive 155%, in the next 4.5 years to $4.662 bil at June 30, 2013. Its Total Bottom Line Profits for that 4.5 year period were $2.688 bil, which was 95% of the Net Assets increase over that same 4.5 year period of time.
OK that's cool, so what drove those Bottom Line Profits? Well, it's a combination of Hospital Operating Income and Non-Operating Income. By far the largest element of Non-Operating Income is the Investment Returns on a Non-Profit Hospital Organization's huge portfolio of Investments in Stocks and Bonds, or their equivalents.
The financial meltdown hit in late 2008, resulting in Advocate Health Care recording Non-Operating Investment Loss of $584 mil in 2008, which was the driver of its Bottom Line Loss of $472 mil in 2008.
Then the Obama Administration steps in and coupled with much help from the US Fed, primarily from Ben Bernanke and Janet Yellen, the country's severely-damaged financial foundation is buttressed. Interest rates drop and the stock market goes on an unbelievable run. Non-Profit Hospital Organizations like Advocate Health Care are major beneficiaries.
For the 4.5 years from the beginning of 2009 to June 30, 2013, Advocate Health Care generated a Total Bottom Line Profit of $2.688 bil, an extremely robust 13.7% of its Total Revenues. This 13.7% Profit Margin exceeds that of more than half of the pristine 30 Dow Industrial companies. I'm sure that many CEOs in the private sector are just shaking their heads at the incredibly robust Profit Margin Percentages of so many Non-Profit Hospital Organizations.
And the focus of all Republicans in the US Congress is on cutting the Medicare Benefits of the middle and lower classes! Give me a break. The primary focus should be on the untaxed excess profits the Non-Profit Hospitals make from their patients. And just where did most of the money come from that comprises the massive Investments in Stocks and Bonds of Non-Profit Hospital Organizations? It came from the cumulative profits the Non-Profit Hospital earned from Patients over the years.
You want to know one of the main reasons the approval rate of the US Congress is now only 5%? I think it's because US citizens have finally come to the realization that only a handful of those in the US Congress can understand financial statements. The country's major problem is a financial one and those in the US Congress are now vehemently fighting over financial issues and only a handful of them can read a financial statement properly.
Anyway, Advocate Health Care's Total Investment Income over that 4.5 years was $686 mil, a very significant 35% of its Total Bottom Line Profits. These excellent Investment Returns were due to low interest rates and an extremely robust stock market.
In addition, Advocate Health Care recorded $467 mil of economic gains on several combinations it entered into over that 4.5 year period. This $467 mil was another 17% of Advocate's Total Revenues in the past 4.5 years.
Now let me address Northwestern Memorial HealthCare (NMHC).
In its Fiscal Year Ended (FYE) Aug 2009, it recorded an Investment Loss of $158 mil due to the financial meltdown in late 2008. This $158 mil Investment Loss was the main reason for NMHC's $181 mil Bottom Line Loss in FYE Aug 2009.
However, In the 3.75 years since then.....or from Sep 2009 to May 2013.....NMHC generated Total Investment Income of $814 mil, which was a massive 95% of its Total Bottom Line Profit over the same 3.75 year period. And over this 3.75 year period, NHMC matched Advocate Health Care's Profit Margin of 13.7% of Total Revenues.
But it gets worse.
Every year NHMC has a charge on its income statement of $53 mil to $56 mil for annual Grants and Academic Support it gives out. And then magically in the most recent 9 months ended May 2013, it increases this amount to $171 mil. So why did they do this? I have a hunch. They generated Investment Income of a massive $284 mil in the 9 months ended May 2013.
But is that really fair to US citizens whose patient fees over the years are being used to grow the massive amount of NMHC's Investment portfolio? And the Republicans in the US Congress are trying to dramatically cut the Medicare Benefits of the middle and lower classes when this clever-by-half financial maneuver is made by NHMC. Is this really fair?
Hospital Sisters Health System generated Total Bottom Line Profits of $473 mil in the most recent four years ended June 30, 2013, which was a high 6.2% of its Total Revenues over the same time period.
For the most recent 3.75 years, North Shore University Health System's Total Investment Income of $395 mil was a massive 85% of its Total Bottom Line Income. Its Total Bottom Line Profits were $467 mil in the most recent 3.75 years, which was a high 7.4% of its Total Revenues over the same time period.
Rush University Medical Center generated Total Bottom Line Profits of $339 mil in the four years ended June 30, 2013, which was 5.0% of its Total Revenues over the same time period.
Cadence Health was formed in a merger on April 1, 2011. Its Total Bottom Line Profits were $284 mil in the most recent two years ended March 31, 2013, which was an extremely high 13.8% of its Total Revenues over the same time period. That's not an April Fools joke. This 13.8% Bottom Line Profit Margin substantially exceeds the Combined Bottom Line Profit Margin of 9.6% for the prestigious 30 Dow Industrial companies.
Children's Memorial Chicago Medical Center generated Total Bottom Line Profits of $346 mil in the most recent 3.75 years, which was an extremely high 13.7% of its Total Revenues over the same time period.
University Chicago Medical Center generated Total Bottom Line Profits of $614 mil in the most recently reported 3.75 years ended March 31, 2013, which was an extremely high 13.4% of its Total Revenues over the same time period.
Very positively impacting this major increase in the Net Assets (Financial Strength) of all 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 very robust. And for States electing to expand Medicaid, this future Net Asset growth will be exceptionally robust.
