| 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 | |||||||
| The Methodist Hospital System | Houston | TX | Jun 13 | 4,122 | Dec 08 | 2,375 | 74% | |
| Texas Health Resources | Arlington | TX | Jun 13 | 3,437 | Dec 08 | 1,921 | 79% | |
| Baylor Health System | Dallas | TX | Jun 13 | 3,269 | Jun 09 | 2,166 | 51% | |
| Texas Children's Hospital | Houston | TX | Jun 13 | 2,865 | Sep 09 | 2,088 | 37% | |
| Christus Health | Irving | TX | Jun 13 | 2,607 | Jun 09 | 2,119 | 23% | |
| Memorial Hermann Healthcare System | Houston | TX | Jun 13 | 2,236 | Jun 09 | 1,509 | 48% | |
| Cook Children's Health | Fort Worth | TX | Jun 13 | 1,651 | Sep 09 | 840 | 97% | |
| Children's Medical Center of Dallas | Dallas | TX | Jun 13 | 1,507 | Dec 08 | 821 | 84% | |
| St Luke's Episcopal Health System | Houston | TX | Jun 13 | 1,241 | Dec 08 | 692 | 79% | |
| Dallas County Hospital (Parkland) | Dallas | TX | Sep 12 | 1,213 | Sep 09 | 962 | 26% | |
| Methodist Health System | Dallas | TX | Jun 13 | 1,042 | Sep 09 | 627 | 66% | |
| Baylor College of Medicine | Houston | TX | Jun 13 | 948 | Jun 09 | 965 | -2% | |
| University Health (San Antonio) | San Antonio | TX | Dec12 | 913 | Dec 08 | 612 | 49% | |
| Scott & White Healthcare | Temple | TX | May 13 | 847 | Aug 09 | 686 | 23% | |
| Harris County Hospital District | Houston | TX | Feb 13 | 745 | Feb 09 | 767 | -3% | |
| Tarrant County Hospital District | Fort Worth | TX | Sep 12 | 671 | Sep 09 | 638 | 5% | |
| Total all 16 | 29,314 | 19,788 | 48% |
As you can see from the above chart, the Total Net Assets of these 16 Texas Non-Profit Hospital Organizations increased by a robust 48% to $29.314 bil during the Obama Administration.
Let me walk you through some key financial aspects of Texas's largest Non-Profit Hospital Organization.....Houston-based The Methodist Hospital System (TMHS).
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 TMHS's case, its Net Assets were $2.375 bil at December 31, 2008, which grew by $1.747 bil, or by a very robust 74%, in the next 4.5 years to $4.122 bil at June 30, 2013. Its Total Bottom Line Profits (Excess of Revenues and Gains over Expenses and Losses) for that 4.5 year period were $1.785 bil, which was 102% of the Net Assets increase over that same 4.5 year period of time.
OK that's cool, so Total Bottom Line Profits drive the change in Net Assets. But what drives these 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.
When the financial meltdown hit in late 2008, the Bottom Line Profits and thus also the Net Assets of Non-Profit Hospital Organizations flat out plummeted.
Then the Obama Administration stepped in and coupled with much help from the US Fed, primarily from Ben Bernanke and Janet Yellen, the country's severely-damaged financial foundation was buttressed. Interest rates drop and the stock market goes on an unbelievable run. Non-Profit Hospital Organizations like TMHS are major beneficiaries.
For the 4.5 years from the beginning of 2009 to June 30, 2013, TMHS generated a Total Bottom Line Profit of $1.785 bil, an off-the-charts 18.4% of its Total Revenues. This 18.4% Profit Margin exceeds that of 24 of the prestigious 30 Dow Industrial companies.
As one perspective, Exxon Mobil is the Texas-based company which progressives are always attacking for generating such enormous profits. Exxon Mobil's Bottom Line Profit Margin in its most recent year was 9.9%, which is 54% of TMHS's Bottom Line Profit Margin of 18.4%.
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 and subsequent investment returns the Non-Profit Hospitals 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.
Now let me address some other large Texas Non-Profit Hospital Organizations.
In the most recent 4.5 years, Texas Health Resources (THR) generated $735 mil of Total Non-Operating Investment Income, which comprised 44% of its Total Bottom Line Profits (Excess of Revenues over Expenses) of $1.679 bil over the same time period.
This THR Total Bottom Line Profit of $1.679 bil was a very high 11.5% of its Total Revenues over the same time span. This 11.5% Bottom Line Profit Margin exceeds that of more than half of the 30 Dow Industrials. Is this right? It's not even close to being right.
For the most recent four years, Baylor Health System generated Total Bottom Line Profits of $1.643 bil, which was a very high 10.8% of its Total Revenues over the same time period. This 10.8% Bottom Line Profit Margin exceeds that of precisely half of the prestigious 30 Dow Industrial companies.
Let me switch the focus to three Texas children health care non-profit organizations.
For the most recent 3.75 years, Cook's Children Health generated Total Bottom Line Profits of $800 mil, which was an off-the-charts 20.3% of its Total Revenues over the same time period. This 20.3% Bottom Line Profit Margin exceeds that of 26 of the prestigious 30 Dow Industrial companies.
For the most recent 4.5 years, Children's Medical Center Dallas generated Total Bottom Line Profits of $609 mil, which was an exceptional 13.9% of its Total Revenues over the same time period. This 13.9% Bottom Line Profit Margin exceeds that of 18 of the prestigious 30 Dow Industrial companies. And while it was generating these exceptional profits, it also received about $25 mil in both 2010 and 2009 in Disproportionate Share Income.
For the most recent 3.75 years, Texas Children's Hospital generated Total Bottom Line Profits of a huge $657 mil, which was a high 9.3% of its Total Revenues over the same time period. This 9.3% Bottom Line Profit Margin is just slightly short of the 9.6% Combined Bottom Line Profit Margin of the 30 prestigious Dow Industrial companies.
Let me now turn my attention to a couple of Texas Non-Profit Hospital Organizations which haven't been as greedy as the above ones.
For the most recent four years, Memorial Hermann Health System (MHHS) generated Total Bottom Line Profits of $713 mil, which was 5.5% of its Total Revenues over the same time period. One thing I find interesting is that in its most recent fiscal year, MHHS generated a Bottom Line Profit of $170 mil, which was burdened by a massive $634 mil in Bad Debt Expense. If Texas were to expand Medicaid, then a large amount of this Bad Debt Expense would go away. If you assume that half of it would go away, the MHHS's Bottom Line Profit moves up from $170 mil to $487 mil. And this excludes the huge positive earnings impact from eliminating a good chunk of its compensated care. And the State of Texas still won't expand Medicaid, even though it will substantially enhance the Bottom Line Profits and the Net Assets (Financial Strength) of all of its Hospitals. Go figure!
And lastly, for the most recent four years, Christus Health System generated Total Bottom Line Profits of $393 mil, which was only 2.7% 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.
