Which Large Hospital Organizations' Profits Increase the Most Under the ACA and the Expansion of Medicaid?

Under the Affordable Care Act (ACA), Hospital Organizations' both future Hospital Operating Income and Bottom Line Income will be bolstered very robustly due to many of the Uninsured getting insurance and also due to the many of the Underinsured getting much better insurance.

And for Hospital Organizations operating hospitals in States electing to Expand Medicaid, this future Profit growth will be exceptionally robust.

There are specifically two items which will drive higher Hospital Organization profits due to the ACA and also especially due to States electing the Expansion of Medicaid.

First, there is the Operating Statement Provision for Bad Debts' earnings charge which will be dramatically reduced due to the substantially better insurance situation of hospital patients.  This Provision for Bad Debts' earnings charge is usually a separate report line on a Hospital Organization's audited Operating Statement.

And second, there is the Operating Statement Uncompensated Charity Care Costs' earnings charge for the amounts hospitals spend on charity care which will also be dramatically reduced.  This Estimated Costs for Uncompensated Charity Care is disclosed in a Hospital Organization's footnotes which accompany its audited financial statements.

So what about the amounts of these two items?  Well, they are absolutely humongous, especially when compared to the related earnings.

From a review of the Electronic Municipal Market Access (EMMA) for the Non-Profit Hospital Organizations and from a review of SEC filings for the Publicly-Held Hospital Organizations, below here are the 18 Hospital Organizations which had the Total of their Provisions for Bad Debts and Costs of their Uncompensated Charity Care exceed $500 mil for one year in their most recent audited financial statements:

				One Year	One Year		One
			One Year	Estimated	Total		Year
		Most	Provision	Cost of	Earnings	One	Bottom
		Recent	For	Uncompensated	Charge	Year	Line
	State	Annual	Bad	Charity	of	Operating	Pretax
	HQs	FYE	Debts	Care	Both	Income	Income
			mils $s	mils $s	mils $s	mils $s	mils $s
Publicly-Held Hospitals
HCA	TN	Dec 2012	3,770	2,381	6,151	2,894	2,894
Community Health Systems	TN	Dec 2012	1,959	125	2,084	619	504
Health Management Assoc	FL	Dec 2012	874	497	1,371	301	301
Tenet Healthcare	TX	Dec 2012	785	437	1,222	334	334
Universal Health Services	PA	Dec 2012	727	177	904	764	764
LifePoint Hospitals	TN	Dec 2012	624	31	655	244	244
Non-Profit Catholic Hospitals
Ascension Health Alliance	MO	Jun 2013	1,173	525	1,698	397	1,123
Dignity Health	CA	Jun 2013	1,094	198	1,292	284	812
Catholic Health Initiatives	CO	Jun 2013	821	321	1,142	(55)	490
Catholic Health East	PA	Dec 2012	235	436	671	118	383
Trinity Health	MI	Jun 2013	480	183	663	305	666
Providence Health	WA	Dec 2012	390	272	662	204	412
Non-Profit Non-Catholic Hospitals
Memorial Hermann Health	TX	Jun 2013	634	136	770	166	170
Banner Health	AZ	Dec 2012	488	149	637	290	601
Adventist Health	FL	Dec 2012	331	302	633	512	508
Cleveland Clinic	OH	Dec 2012	378	155	533	228	685
Sutter Health	CA	Dec 2012	376	153	529	549	791
Carolina's Health Care	NC	Dec 2012	356	153	509	168	375
Total all 18			15,495	6,631	22,126	8,322	12,057
Provision for Bad Debts						15,495	15,495
Uncompensated Charity Care Costs						6,631	6,631
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						30,448
Bottom Line Pretax Income Excluding Bad Debts and Uncompensated Charity Care Costs							34,183

So, these 18 Hospital Organizations had Audited Total Operating Income of $8.322 bil in the most recent fiscal year.  Driving down this $8.322 bil Total Operating Income were Total Provisions for Bad Debts of a massive $15.495 bil and Total Costs of Uncompensated Charity Care of another $6.631 bil.  Thus, exclusive of these two earnings charges, Total Operating Income would have been a massive $30.448 bil, which is $22.126 higher than the reported $8.322 bil.

And these 18 Hospital Organizations had Audited Total Bottom Line Pretax Income (both Operating Income and Non-Operating Income) of $12.057 bil in the most recent fiscal year.  Driving down this $12.057 bil Total Bottom Line Pretax Income were Total Provisions for Bad Debts of a massive $15.495 bil and Total Costs of Uncompensated Charity Care of another $6.631 bil.  Thus, exclusive of these two earnings charges, Total Bottom Line Pretax Income would have been a massive $34.183 bil, which is $22.126 bil higher than the reported $12.057 bil.
 
Granted these two earnings charges will not be totally eliminated with the ACA and in combination with States electing to Expand Medicaid, but a substantial amount of these two earnings charges will be eliminated, and especially so if States elect to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.

And the above monstrous earnings charges are just for 18 Hospital Organizations and just for one year!

I really don't understand how a financially savvy State Governor and financially savvy State Legislatures could possibly vote to not Expand Medicaid.  The US Government is 100% funding the first three years of Medicaid Expansion.

Further, if Medicaid is Expanded, the Hospital Organizations will be getting these just monstrous increases in their annual earnings in each future year, which will ultimately accrue to the benefit of State citizens when they are hospitalized and will be paying much lower hospital charges.  It will also cut the US Debt markedly since the US Government is paying for a good chunk of these hospitalization charges.

I really can't understand why some State Governors and State Legislators would want to financially hammer their State Hospital Organizations, their State citizens and the US Government Debt load like this.

Very financially astute Republican State Governors like Ohio's John Kasich and Florida's Rick Scott, who also has a keen insight on this issue since he was formerly a CEO of a large hospital organization, already have this all figured out.  And so has Arizona Republican Governor Jan Brewer.  And so has the perceptive US stock market which has moved up dramatically the market prices of the common stocks of the Publicly-Held Hospital Organizations.