Wisconsin Smaller Non-Profit Hospital Modest Profits Show Need For Medicaid Expansion

From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found a huge number of 34 Non-Profit Hospital Organizations headquartered in the State of Wisconsin with Total Operating Revenues of more than $10 mil each in the most recent fiscal year.

To understand what is going on with Wisconsin Non-Profit Hospital Organization Earnings, it is helpful to break them down by how financially strong the Hospitals are.....or by their Net Assets.

When this breakdown is done, there is a crystal-clear conclusion.....the weaker the financial strength of the Hospital Organization, the lower the earnings.

Bottom Line Earnings is a combination of Operating Income and Non-Operating Income, with the latter being due predominantly to Investment Returns.

On a Hospital Operating Income basis, here is a summary of the most recent audited annual earnings results of these Hospitals by Net Asset size:

Net Assets > $1 Bil..............Total Operating Income as % of Total Revenues..4.5%
Net Assets $400 Mil-$1 Bil.Total Operating Income as % of Total Revenues..4.0%
Net Assets $200-400 Mil...Total Operating Income as % of Total Revenues..3.5%
Net Assets < $200 Mil........Total Operating Income as % of Total Revenues..2.5%

When the 16 Wisconsin Hospitals with Net Assets of less than $200 mil are generating Total Operating Income of a very modest 2.5% of their Total Operating Revenues, then they are struggling and need financial help.

The best way to provide this needed financial boost is to simply Expand Medicaid in Wisconsin.  This will substantially reduce two Hospital Operating Statement Earnings Charges.....Provisions for Bad Debts and Uncompensated Charity Care Costs.

And it's the same pattern with Bottom Line Profits by Net Asset size:

Net Assets > $1 Bil..............Total Bottom Line Profits as % of Total Revenues..7.5%
Net Assets $400 Mil-$1 Bil.Total Bottom Line Profits as % of Total Revenues..6.9%
Net Assets $200-400 Mil....Total Bottom Line Profits as % of Total Revenues..6.0%
Net Assets < $200 Mil........Total Bottom Line Profits as % of Total Revenues..4.2%

The large Wisconsin Hospitals are doing just great.....but clearly not the smaller ones.

From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), below here are the Bottom Line Profits, Operating Profits and Operating Revenues of the 34 Non-Profit Hospital Organizations headquartered in the State of Wisconsin with Total Operating Revenues of more than $10 mil each in the most recent fiscal year, stratified by Net Asset size:

`		Most
		Recent			Bottom		Operating
		Annual	Bottom		Line		Income
		Fiscal	Line	Total	Profit		Profit
	City	Year	Net	Operating	Margin	Operating	Margin
	HQs	End	Income	Revenues	%	Income	%
			mils $s	mils $s		mils $s	mils $s
Wisconsin Non-Profit Hospital Organizations
Net Assets > $1 Bil
Aurora Health Care	Milwaukee	Dec 2012	198	4,125	4.8%	138	3.3%
Froedtert	Milwaukee	Jun 2013	179	1,499	11.9%	83	5.5%
Sisters St. Francis in Wisconsin	Various	Jun 2013	120	868	13.8%	62	7.1%
Ministry Health Care	Milwaukee	Jun 2013	101	1,597	6.3%	89	5.6%
Medical College Wisconsin	Milwaukee	Jun 2013	81	926	8.7%	31	3.3%
Total all 5...Net Assets > $1 Bil			679	9,015	7.5%	403	4.5%
Net Assets $400 Mil-$1 Bil
ProHealth Care	Waukesha	Sep 2013	97	688	14.1%	33	4.8%
Univ Wisconsin Hosps&Clinics	Madison	Jun 2013	84	1,258	6.7%	109	8.7%
Gundersen Lutheran Health	La Crosse	Dec 2012	83	882	9.4%	43	4.9%
Marshfield Clinic	Eau Claire	Sep 2012	79	1,872	4.2%	48	2.6%
Wheaton Franciscan Health	Glendale	Jun 2013	69	1,763	3.9%	39	2.2%
ThedaCare	Appleton	Dec 2012	62	709	8.7%	28	3.9%
Children's Hospital & Health	Milwaukee	Dec 2012	58	724	8.0%	17	2.3%
Aspirus Wausau Obligated Group	Wausau	Jun 2013	57	628	9.1%	28	4.5%
Total all 8 With Net Assets $400 Mil-$1 Bil			589	8,524	6.9%	345	4.0%
Net Assets $200-400 Mil
Meriter Hospital	Madison	Dec 2012	35.0	432	8.1%	18.9	4.4%
Agnesian HealthCare	Fond du Lac	Jun 2013	30.4	413	7.4%	23.2	5.6%
Bellin Health	Green Bay	Sep 2012	17.9	399	4.5%	9.6	2.4%
Franciscan Sisters Christian Charity	Manitowoc	Dec 2012	17.1	185	9.2%	2.1	1.1%
Mercy Alliance	Janesville	Jun 2012	16.1	497	3.2%	13.7	2.8%
Total all 5..Net Assets $200-400 mil			116.5	1,926	6.0%	67.5	3.5%
Net Assets < $200 Mil
Beloit Health	Beloit	Dec 2012	7.7	191	4.0%	5.0	2.6%
Riverview Hospital Association	Wisconsin Rapids	Aug 2012	7.5	86	8.7%	5.0	5.8%
Sauk Prairie Memorial Hospital	Prairie du Sac	Dec 2012	5.6	62	9.0%	3.1	5.0%
Watertown Regional Medical Center	Watertown	Sep 2012	5.2	96	5.4%	1.2	1.3%
Tomah Memorial Hospital	Tomah	Sep 2012	5.1	36	14.2%	3.6	10.0%
Monroe Clinic	Monroe	Dec 2012	4.1	163	2.5%	5.8	3.6%
Divine Savior Healthcare	Portage	Jun 2013	4.1	79	5.2%	2.8	3.5%
Bay Area Medical Center	Marinette	Dec 2012	4.0	113	3.5%	1.6	1.4%
Upland Hills Health	Dodgeville	Sep 2012	2.7	45	6.0%	1.9	4.2%
Richland Hospital	Richland Center	Dec 2012	2.6	35	7.4%	2.0	5.7%
Beaver Dam Community Hospitals	Beaver Dam	Jun 2013	2.5	97	2.6%	2.7	2.8%
Fort HealthCare	Atkinson	Sep 2012	1.5	120	1.3%	-2.3	-1.9%
Cumberland Memorial Hospital	Cumberland	Jun 2012	1.0	22	4.5%	0.9	4.1%
Moundview Memorial Hospital	Friendship	Jun 2012	0.6	15	4.0%	0.5	3.3%
Community Memorial Hospital	Oconto Falls	Sep 2012	0.1	35	0.3%	-0.1	-0.3%
Community Health Network	Berlin	Sep 2012	(1.3)	78	-1.7%	-1.8	-2.3%
Total all 16..Net Assets < $200 mil			53.0	1,273	4.2%	31.9	2.5%

    
    

Georgia Smaller Non-Profit Hospitals Very Weak Profits Show Need For Medicaid Expansion

In an earlier recent post Georgia Non-Profit Hospital Earnings On Fire, I showed that the 11 large Georgia Non-Profit Hospital Organizations with Net Assets above $400 mil each experienced earnings in the most recent year which were on fire.

Bottom Line Earnings is a combination of Operating Income and Non-Operating Income, with the latter being due predominantly to Investment Returns.

These 11 large Georgia Non-Profit Hospital Organizations generated Audited Total Bottom Line Profits of $1.034 bil in the most recent fiscal year, which was an exceptionally robust 10.2% of their Total Operating Revenues of $10.176 bil.

So what about the smaller Georgia Non-Profit Hospital Organizations?  How did they do?

From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found 12 Non-Profit Hospital Organizations headquartered in the State of Georgia with Total Operating Revenues of more than $10 mil each in the most recent fiscal year but also with Net Assets of less than $400 mil each.

These 12 smaller Georgia Non-Profit Hospital Organizations generated Total Bottom Line Earnings of $93.2 mil in the most recent fiscal year, which was a very weak 2.5% of Total Operating Revenues.  And this $93.2 mil of Earnings was substantially overstated in real terms since Grady Memorial Hospital's Bottom Line Earnings of $46.3 mil included $63.3 mil of Contributions from Fulton and DeKalb Counties.  Absent these $63.3 mil of County Contributions, the Total Bottom Line Earnings of these 12 smaller Georgia Hospital Organizations drops to a dismal $29.9 mil, or only 0.8% of Total Operating Revenues.

The two very positive earnings performing hospitals.....in Tifton and in Valdosta.....are both just off of I-75 on the way to Florida.

But this story of dismal smaller Georgia Non-Profit Hospital earnings gets even worse.  In the most recent fiscal year, the Total Operating Loss of these 12 smaller Georgia Hospitals was $41 mil.

Below here are the Bottom Line Earnings (Losses) and Total Operating Revenues of each of these 12 smaller Georgia Non-Profit Hospital Organizations for the most recent fiscal year:

		Most	Bottom
		Recent	Line	Total	Bottom
		Annual	Net	Operating	Line
		Fiscal	Income	Revenues	Profit
	City	Year	Current	Current	Margin
	HQs	End	Year	Year	%
			mils $s	mils $s
Smaller Georgia Non-Profit Hospital Organizations
Hosp Authority Futon-DeKalb County (Grady Memorial Hosp)	Atlanta	Dec 2012	46.3	705	6.6%
Hosp Authority Tift County	Tifton	Sep 2012	41.5	268	15.5%
Hosp Authority Valdosta&Lowndes County	Valdosta	Sep 2012	28.4	316	9.0%
Floyd Healthcare	Rome	Jun 2013	6.7	328	2.0%
Crisp Regional Health	Cordele	Jun 2012	4.4	66	6.7%
Bacon County Health	Alma	Jun 2012	2.0	32	6.3%
Memorial Health	Savannah	Dec 2012	(0.7)	534	-0.1%
Columbus Regional Healthcare	Columbus	Jun 2013	(1.0)	424	-0.2%
Hosp Authority Wilkes County	Washington	Apr 2013	(1.8)	15	-12.0%
Athens Regional Health	Athens	Sep 2012	(2.2)	421	-0.5%
Southern Regional Health	Riverdale	Jun 2012	(13.4)	202	-6.6%
DeKalb Regional Health	Decatur	Jun 2013	(17.0)	415	-4.1%
Total all 12			93.2	3,726	2.5%

So, the country's huge and continually expanding income inequality is not just related to very wealthy individuals and everyone else.  It also clearly exists in the Non-Profit Hospital arena.

The solution to this massive income inequality in the Non-Profit Hospital arena really isn't that difficult.  It's a two-step process.

The first step of the solution is simply for every State to Expand Medicaid.  And there shouldn't be a problem with some States being permitted to do a creative disguised Expansion of Medicaid.

Let me show the relevant amounts related to the financial impact of Georgia Expanding 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 usually 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 very large, especially when compared to the related Hospital Operating Income.

From a review of EMMA, below here are the Provisions for Bad Debts and Costs of their Uncompensated Charity Care disclosed in their most recent audited financial statements of each of these 12 smaller Georgia Non-Profit Hospital Organizations:

		Most		One Year	One	One
		Recent	One Year	Estimated	Year	Year
		Annual	Provision	Cost of	Total	Hospital
		Fiscal	For	Uncompensated	Earnings	Operating
	City	Year	Bad	Charity	Charge	Income
	HQs	End	Debts	Care	of Both	(Loss)
			mils $s	mils $s	mils $s	mils $s
Smaller Georgia Non-Profit Hospital Organizations
Hosp Auth Fulton-DeKalb County (Grady Mem Hosp)	Atlanta	Dec 2012	263	107	370	(30)
DeKalb Regional Health	Decatur	Jun 2013	105	9	114	(27)
Hosp Authority Tift County	Tifton	Sep 2012	33	59	92	22
Memorial Health	Savannah	Dec 2012	44	34	78	-
Southern Regional Health	Riverdale	Jun 2012	55	8	63	(14)
Floyd Healthcare	Rome	Jun 2013	38	23	61	2
Hosp Authority Valdosta&Lowndes County	Valdosta	Sep 2012	43	12	55	19
Columbus Regional Healthcare	Columbus	Jun 2013	39	12	51	(17)
Athens Regional Health	Athens	Sep 2012	29	19	48	(1)
Crisp Regional Health	Cordele	Jun 2012	15	1	16	4
Bacon County Health	Alma	Jun 2012	5	1	6	2
Hosp Authority Wilkes County	Washington	Apr 2013	1	-	1	(1)
Total all 12			670	285	955	(41)
Provision for Bad Debts						670
Estimated Costs of Uncompensated Charity Care						285
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						914

So, these 12 smaller Georgia Non-Profit Hospital Organizations generated Audited Total Hospital Operating Loss of $41 mil in the most recent fiscal year.  Causing this $41 mil Total Hospital Operating Loss were Total Provisions for Bad Debts of $670 mil and Total Costs of Uncompensated Charity Care of another $285 mil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $914 mil, which is $955 mil higher than the reported $41 mil Hospital Operating Loss.

Now let me focus on a Bottom Line Profit Margin % basis.  For all 12 smaller Georgia Non-Profit Hospital Organizations combined, the Total Bottom Line Profits were $93 mil in the most recent fiscal year and Total Operating Revenues were $3.726 bil in the most recent year resulting in a 2.5% Profit Margin.

Excluding the above $670 mil of Provisions for Bad Debts and the above $285 mil of Uncompensated Charity Care Costs, the Total Bottom Line Profits exclusive of these two charges would be $1.048 bil, which would yield a Profit Margin of 28.1% in the most recent year for these 12 smaller Georgia Non-Profit Hospital Organizations.....yeah, that's more than 11 times the reported 2.5% Profit Margin.

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 Georgia wisely elects to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.

Which takes me to the second step of this solution.

There are so many extremely profitable Non-Profit Hospital Organizations all over the country, like the 11 large ones in Georgia which generated a Total Bottom Line Profit Margin of 10.2% of Total Operating Revenues in the most recent fiscal year.

These excessive profits have been going on, and compounding, for many years, particularly during the entire period of the Obama Administration, where interest rates have been extremely low and the stock market appreciation extremely high.

Further, these highly profitable large Non-Profit Hospital Organizations will also have their already sky-high annual earnings get an additional huge dose of profits from the ACA and especially from the Expansion of Medicaid.

Thus it only makes sense that the clearly excessive past and future profits of these large Non-Profit Hospital Organizations be used in wisely-designed, creative ways to grow the US economy and bring down US unemployment and US underemployment.  For instance, a wisely designed, creative removal of these excess profits could be used to finance a substantial portion of the 3 or 4 years elimination of the US sequester budget cuts.  And this removal of excess profits could also be used to finance US infrastructure investments.

The end result of this two-step solution process will be to increase US real GDP growth, to decrease US unemployment and US underemployment, to substantially enhance the financial strength of severely struggling smaller hospitals, to reduce the debt load of both US and State Governments, and to simultaneously substantially bend back the long-term US Total Health Care Cost Curve.

Texas Smaller Non-Profit Hospitals Weak Profits Show Need For Medicaid Expansion

In an earlier recent post Texas Non-Profit Hospital Earnings On Fire, I showed that the 16 large Texas Non-Profit Hospital Organizations with Net Assets above $400 mil each experienced earnings in the most recent year which were on fire.

Bottom Line Earnings is a combination of Operating Income and Non-Operating Income, with the latter being due predominantly to Investment Returns.

These 16 Large Texas Non-Profit Hospital Organizations generated Audited Total Bottom Line Profits of $2.759 bil in the most recent fiscal year, which was a very robust 9.1% of their Total Operating Revenues of $30.350 bil.

So what about the Texas County District Hospitals and the smaller Texas Non-Profit Hospital Organizations?  How did they do?

From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found 21 Texas County District Hospital Organizations headquartered with Total Operating Revenues of more than $10 mil each in the most recent fiscal year.

These 21 Texas County District Hospitals Organizations generated Total Bottom Line Earnings of $129 mil in the most recent fiscal year, which was down 39% from the prior year and a very modest 2.9% of Total Operating Revenues.

But this story of dismal Texas County District Hospital earnings gets much worse.  In the most recent fiscal year, their Total Operating Losses were a massive $1.604 bil.  Property Tax Revenues provided the dominant funding vehicle for these Operating Losses and turned this Total Operating Loss of $1.604 bil into a modest Total Bottom Line Profit of $129 mil, nearly all of which was related to the Bexar County San Antonio Hospital Organization.

Below here are the Bottom Line Earnings (Losses) and Total Operating Revenues of each of these 21 Texas County District Hospital Organizations for each of the most recent two fiscal years:

		Most	Bottom	Bottom
		Recent	Line	Line	Total	Total
		Annual	Net	Net	Operating	Operating
		Fiscal	Income	Income	Revenues	Revenues
	City	Year	Current	Prior	Current	Prior
	HQs	End	Year	Year	Year	Year
			mils $s	mils $s	mils $s	mils $s
Texas County District Hospitals
Bexar	San Antonio	Dec 2012	100	76	773	705
Dallas (Parkland)	Dallas	Sep 2012	33	106	1,235	1,208
Midland	Midland	Sep 2012	15	(4)	231	209
Tarrant	Fort Worth	Sep 2012	14	3	442	420
Scurry	Snyder	Dec 2012	5	5	20	21
Wilson	Floresville	Sep 2012	4	1	22	19
Andrews	Andrews	Sep 2012	3	4	24	24
Dawson	Lamesa	Mar 2012	3	2	17	18
Ector	Odessa	Sep 2012	3	(2)	211	215
ElPaso	El Paso	Sep 2012	3	4	376	343
Metagorda	Bay City	Sep 2012	3	3	37	36
Deaf Smith	Hereford	Sep 2012	1	1	18	15
Hunt Memorial	Greenville	Sep 2012	1	3	97	95
Mitchell	Colorado City	Sep 2012	1	1	15	16
Angleton-Danbury	Angleton	Sep 2012	-	-	30	29
Gaines	Seminole	Sep 2012	-	1	19	15
Titus	Mt Pleasant	Sep 2012	-	3	62	67
Hopkins	Sulphur Springs	Sep 2012	(5)	2	53	54
Gainesville	Gainesville	Sep 2012	(7)	(1)	26	30
Nacogdoches	Nacogdoches	Jun 2012	(7)	(5)	74	80
Harris	Houston	Feb 2013	(41)	7	593	559
Total all 21			129	210	4,375	4,178
% Change From Prior Year			-39%		5%
Total Bottom Line Profits as % of Total Operating Revenues			2.9%	5.0%

And in an earlier post Texas County District Hospitals, I showed how Texans paying the Property Taxes funding these massive Operating Losses of $1.604 bil should get huge Property Tax relief if Medicaid were expanded in Texas.


OK so what about the smaller Texas Non-Profit Hospital Organizations which weren't Texas County District Hospitals?  How did they do?

From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found 13 Non-Profit Hospital Organizations headquartered in the State of Texas with Total Operating Revenues of more than $10 mil each in the most recent fiscal year but also with Net Assets of less than $400 mil each.

These 13 smaller Texas Non-Profit Hospital Organizations generated Total Bottom Line Earnings of $78 mil in the most recent fiscal year, which was down 36% from the prior year.

These Total Bottom Line Earnings were only 2.2% of the related Total Operating Revenues for these 13 smaller Texas Non-Profit Hospital Organizations as compared with a substantially higher 9.1% for the 15 large ones. 

Below here are the Bottom Line Earnings (Losses) and Total Operating Revenues of each of these 13 smaller Texas Non-Profit Hospital Organizations for each of the most recent two fiscal years:

		Most	Bottom	Bottom
		Recent	Line	Line	Total	Total
		Annual	Net	Net	Operating	Operating
		Fiscal	Income	Income	Revenues	Revenues
	City	Year	Current	Prior	Current	Prior
	HQs	End	Year	Year	Year	Year
			mils $s	mils $s	mils $s	mils $s
Smaller Texas Non-County District Hospitals
United Regional Health Care	Wichita Falls	Dec 2012	40	40	279	290
Hendrick Medical Center	Abilene	Aug 2012	34	41	323	309
East Texas Medical Center	Tyler	Oct 2012	12	20	942	888
Decatur Hospital Authority	Decatur	Dec 2012	12	2	144	124
Hillcrest Baptist Medical Center	Waco	Aug 2012	9	4	223	215
Good Shepherd Health	Longview	Sep 2012	4	13	402	375
Mission Hospital	Mission	Sep 2012	-	2	112	114
St. Mark's Medical Center	LaGrange	Jun 2012	-	1	27	26
Memorial Health System East Texas	Lufkin	Dec 2012	(1)	(16)	192	178
Community Hospital Brazosport	Lake Jackson	Dec 2012	(4)	(5)	73	73
Guadalupe Regional Medical Center	Seguin	Sep 2012	(5)	1	80	79
Trinity Mother Frances Health	Tyler	Jun 2013	(7)	27	653	644
Sid Peterson Memorial Hospital	Kerrville	Jun 2012	(16)	(8)	93	90
Total all  13			78	122	3,543	3,405
% Change From Prior Year			-36%		4%
Total Bottom Line Profits as % of Total Operating Revenues			2.2%	3.6%

So, the country's huge and continually expanding income inequality is not just related to very wealthy individuals and everyone else.  It also clearly exists in the Non-Profit Hospital arena.

The solution to this massive income inequality in the Non-Profit Hospital arena really isn't that difficult.  It's a two-step process.

The first step of the solution is simply for every State to Expand Medicaid.  And there shouldn't be a problem with some States being permitted to do a creative disguised Expansion of Medicaid.

Let me show the relevant amounts related to the financial impact on these smaller Texas Hospitals of Texas Expanding 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 usually 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 very large, especially when compared to the related Hospital Operating Income.

From a review of EMMA, below here are the Provisions for Bad Debts and Costs of their Uncompensated Charity Care disclosed in their most recent audited financial statements of each of these 13 smaller Texas Non-Profit Hospital Organizations:

		Most		One Year	One	One
		Recent	One Year	Estimated	Year	Year
		Annual	Provision	Cost of	Total	Hospital
		Fiscal	For	Uncompensated	Earnings	Operating
	City	Year	Bad	Charity	Charge	Income
	HQs	End	Debts	Care	of Both	(Loss)
			mils $s	mils $s	mils $s	mils $s
Smaller Texas Non-County District Hospitals
East Texas Medical Center	Tyler	Oct 2012	155	37	192	12
Good Shepherd Health	Longview	Sep 2012	134	19	153	6
Memorial Health System East Texas	Lufkin	Dec 2012	96	9	105	(3)
Trinity Mother Frances Health	Tyler	Jun 2013	51	20	71	2
Hendrick Medical Center	Abilene	Aug 2012	43	14	57	21
United Regional Health Care	Wichita Falls	Dec 2012	26	20	46	26
Hillcrest Baptist Medical Center	Waco	Aug 2012	31	14	45	7
Guadalupe Regional Medical Center	Seguin	Sep 2012	9	22	31	(1)
Community Hospital Brazosport	Lake Jackson	Dec 2012	26	2	28	(4)
Decatur Hospital Authority	Decatur	Dec 2012	20	7	27	16
Mission Hospital	Mission	Sep 2012	19	8	27	(2)
Sid Peterson Memorial Hospital	Kerrville	Jun 2012	7	7	14	(5)
St. Mark's Medical Center	LaGrange	Jun 2012	3	-	3	-
Total all  13			620	179	799	75
Provision for Bad Debts						620
Estimated Costs of Uncompensated Charity Care						179
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						874

So, these 13 smaller Texas Non-Profit Hospital Organizations generated Audited Total Hospital Operating Income of $75 mil in the most recent fiscal year.  Driving down this $75 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $620 mil and Total Costs of Uncompensated Charity Care of another $179 mil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $874 mil, which is $799 mil higher than the reported $75 mil.

Now let me focus on a Bottom Line Profit Margin % basis.  For all 13 smaller Texas Non-Profit Hospital Organizations combined, the Total Bottom Line Profits were $78 mil in the most recent fiscal year and Total Operating Revenues were $3.543 bil in the most recent year resulting in a 2.2% Profit Margin.

Excluding the above $620 mil of Provisions for Bad Debts and the above $179 mil of Uncompensated Charity Care Costs, the Total Bottom Line Profits exclusive of these two charges would be $877 mil, which would yield a Profit Margin of 24.8% in the most recent year for these 13 smaller Texas Non-Profit Hospital Organizations.....yeah, that's more than 11 times the reported 2.2% Profit Margin %.

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 Texas were to wisely elect to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.

Which takes me to the second step of this solution.

There are so many extremely profitable Non-Profit Hospital Organizations all over the country, like the 16 large ones in Texas which generated a Total Bottom Line Profit Margin of 9.1% of Total Operating Revenues in the most recent fiscal year.

These excessive profits have been going on, and compounding, for many years, particularly during the entire period of the Obama Administration, where interest rates have been extremely low and the stock market appreciation extremely high.

Further, these highly profitable large Non-Profit Hospital Organizations will also have their already sky-high annual earnings get an additional huge dose of profits from the ACA and especially from the Expansion of Medicaid.

Thus it only makes sense that the clearly excessive past and future profits of these large Non-Profit Hospital Organizations be used in wisely-designed, creative ways to grow the US economy and bring down US unemployment and US underemployment.  For instance, a wisely designed, creative removal of these excess profits could be used to finance a substantial portion of the 3 or 4 years elimination of the US sequester budget cuts.  And this removal of excess profits could also be used to finance US infrastructure investments.

The end result of this two-step solution process will be to increase US real GDP growth, to decrease US unemployment and US underemployment, to substantially enhance the financial strength of severely struggling smaller hospitals, to reduce the debt load of both US and State Governments, and to simultaneously substantially bend back the long-term US Total Health Care Cost Curve.