Below here are the Bottom Line Profits, Total Operating Revenues and the related Profit Margin Percentages in the most recent audited fiscal year reported for each of the remaining 33 California Non-Profit Hospital Organizations:
|mils $s||mils $s|
|California Hospital Organizations|
|Dignity Health||San Francisco||Jun 2013||812||10,412||7.8%|
|Sutter Health||Sacramento||Dec 2012||791||9,560||8.3%|
|Scripps Health||San Diego||Sep 2012||410||2,564||16.0%|
|Sharp HealthCare||San Diego||Sep 2012||320||2,711||11.8%|
|City of Hope||Duarte||Sep 2012||266||1,283||20.7%|
|St. Joseph Health System (1)||Orange||Jun 2013||209||4,956||4.2%|
|Memorial Health Services||Fountain Valley||Jun 2013||198||2,094||9.5%|
|Stanford Hospitals and Clinics||Stanford||Aug 2012||195||2,430||8.0%|
|U Cal, LA Medical Center||Los Angeles||Jun 2012||192||1,820||10.5%|
|Rady Children's Hospital San Diego||San Diego||Jun 2013||167||811||20.6%|
|Hoag Memorial Hospital||Newport Beach||Sep 2012||143||932||15.3%|
|Children's Hospital Central California||Madera||Aug 2012||139||538||25.8%|
|Adventist Health West||Roseville||Dec 2012||133||2,926||4.5%|
|Community Medical Centers||Fresno||Aug 2012||132||1,185||11.1%|
|John Muir Health||Walnut Creek||Dec 2012||129||1,459||8.8%|
|El Camino Healthcare||Mountain View||Jun 2013||103||713||14.4%|
|U Cal, San Fran Medical Center||San Francisco||Jun 2012||101||1,977||5.1%|
|U Cal, San Diego Medical Center||San Diego||Jun 2012||96||1,045||9.2%|
|Cedars-Sinai Medical Center||West Hollywood||Jun 2012||95||2,576||3.7%|
|Packard Children's Hospital Stanford||Stanford||Aug 2012||85||980||8.7%|
|Loma Linda University Medical Center||Loma Linda||Dec 2012||71||1,241||5.7%|
|Children's Hospital Los Angeles||Los Angeles||Jun 2013||61||866||7.0%|
|Cottage Health System||Santa Barbara||Dec 2012||53||629||8.4%|
|Huntington Memorial Hospital||Pasadena||Dec 2012||53||543||9.8%|
|U Cal, Irvine Medical Center||Orange||Jun 2012||47||735||6.4%|
|Community Hospital Foundation||Monterey||Dec 2012||39||431||9.0%|
|U Cal, Davis Medical Center||Sacramento||Jun 2012||35||1,337||2.6%|
|PIH Health||Whittier||Sep 2012||35||599||5.8%|
|Torrance Memorial Medical Center||Torrance||Dec 2012||31||515||6.0%|
|Children's HealthCare Orange County||Orange||Jun 2012||25||541||4.6%|
|Fremont-Rideout Health||Yuba City||Jun 2012||22||325||6.8%|
|Washington Township Hospital||Fremont||Jun 2013||1||476||0.2%|
|Eisenhower Medical Center||Rancho Mirage||Jun 2012||(34)||456||-7.5%|
|Total all 33||5,155||61,666||8.4%|
(1) St. Joseph Health System's Bottom Line Profit of $209 mil above excludes the $1,713 mil economic gain resulting from its affiliation with other Hospital Organizations.
As you can see in the above chart, the Total Bottom Line Profits for these 33 California Non-Profit Hospital Organizations was $5.155 bil in the most recent audited fiscal year reported, which was a very robust 8.4% of Total Operating Revenues. As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies is a not substantially higher 9.6% of their Total Revenues in the most recent year.
When you compare the 8.4% Total Bottom Line Profit Margin of these 33 California Non-Profit Hospital Organizations with the 9.6% Total Bottom Line Profit Margin of the 30 Dow Industrials, which are some of the very best For-Profit US companies, the clear conclusion is that the earnings of these California Hospital Organizations in the most recent year were on fire.
These very strong bottom line profits of these 33 California Non-Profit Hospital Organizations were attributable to superb fiscal measures and much more effective health care delivery adopted by hospital executives and hospital employees, which were initiated in conjunction with Obamacare. In addition, the strong US stock market and lower interest rates added to investment returns and thus also to bottom line profits of these Hospital Organizations.
And it wasn't just the current fiscal year where these California Non-Profit Hospital Bottom Line Earnings were so strong.
A Non-Profit Hospital Organization's Net Assets, or its Excess of Total Assets over Total Liabilities, results overwhelmingly from the accumulated Tax-free Bottom Line Profits over time.
Since the beginning of the Obama Administration, these 33 California Non-Profit Hospital Organizations have seen their Total Net Assets grow from $31.539 bil to $52.224 bil at the most recently reported date, or an increase of a massive $20.685 bil, or up 65%.
But there's even much more to this incredibly positive earnings story.
When the Insurance Exchanges and Medicaid Expansion both kick in in California starting in 2014, these California Non-Profit Hospital Organizations should see their profits increase even more......and by quite a bit more.
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.
Bottom Line Income is a combination of Hospital Operating Income and Non-Operating Income, with the latter being predominantly Investment Returns.
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 very large when compared to the related Hospital Operating Income.
From a review of the Electronic Municipal Market Access (EMMA), below here are the most recent audited year's Provision for Bad Debts and Uncompensated Charity Care Costs for the 27 California Non-Profit Hospital Organizations which had Net Assets above $400 mil currently. I excluded below the five large California Children's Hospitals located in LA, San Diego, Stanford, Orange County and Central California as well as the City of Hope in Duarte:
|mils $s||mils $s||mils $s||mils $s|
|California Hospital Organizations|
|Dignity Health||Jun 2013||1,094||198||1,292||284|
|Sutter Health||Dec 2012||376||153||529||549|
|St. Joseph Health||Jun 2013||237||93||330||50|
|Cedars-Sinai Medical Center||Jun 2012||284||43||327||112|
|Adventist Health West||Dec 2012||156||52||208||133|
|U Cal, Davis Medical Center||Jun 2012||83||52||135||45|
|U Cal, San Diego Medical Center||Jun 2012||98||34||132||96|
|Memorial Health Services||Jun 2013||108||19||127||139|
|Stanford Hospitals and Clinics||Aug 2012||99||27||126||237|
|Community Medical Centers Fresno||Aug 2012||114||9||123||132|
|Scripps Health||Sep 2012||72||39||111||233|
|Sharp HealthCare||Sep 2012||30||58||88||242|
|John Muir Health||Dec 2012||61||24||85||129|
|U Cal, San Francisco Medical Center||Jun 2012||73||7||80||96|
|Loma Linda University Medical Center||Dec 2012||47||28||75||71|
|Washington Township Hospital||Jun 2013||72||72||1|
|U Cal, Los Angeles Medical Center||Jun 2012||40||9||49||230|
|Community Hospital Foundation Monterey||Dec 2012||31||13||44||29|
|Cottage Health System||Dec 2012||21||17||38||21|
|Hoag Memorial Hospital||Sep 2012||29||8||37||56|
|PIH Health Whittier||Sep 2012||29||7||36||33|
|Huntington Memorial Hospital||Dec 2012||19||10||29||9|
|U Cal, Irvine Medical Center||Jun 2012||12||17||29||58|
|Torrance Memorial Medical Center||Dec 2012||17||8||25||7|
|Eisenhower Medical Center||Jun 2012||22||3||25||(34)|
|Fremont-Rideout Health||Jun 2012||21||1||22||23|
|El Camino Healthcare||Jun 2013||15||2||17||65|
|Total all 27||3,260||931||4,191||3,046|
|Provision for Bad Debts||3,260|
|Uncompensated Charity Care Costs||931|
|Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs||7,237|
So, these 27 California Non-Profit Hospital Organizations had Audited Total Hospital Operating Income of $3.046 bil in the most recent fiscal year audited. Driving down this $3.046 bil Total Hospital Operating Income were Total Provisions for Bad Debts of $3.260 bil and Total Costs of Uncompensated Charity Care of another $0.931 bil. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $7.237 bil, which is $4.191 bil higher than the reported $3.046 bil.
Granted these two earnings charges will not be totally eliminated with the ACA and in combination with States like California choosing to Expand Medicaid, but a substantial amount of these two earnings charges will be eliminated, and especially so because California elected to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.
And the above two large earnings charges are just for one year.
It is pretty clear why California astutely chose to Expand Medicaid, especially since the US Government is 100% funding the first three years of Medicaid Expansion.
With these exceptional, ongoing California Non-Profit Hospital earnings under Obamacare, the ultimate result should be a very significant reduction in hospital patient charges, a significant bending back of the US Long-term Total Health Care Cost Curve and a substantial reduction in the US Debt.
That's quite a financial Trifecta!
And it also only makes sense that some of these huge past and future bottom line profits of these US Hospital Organizations, both Non-Profit and For-Profit ones, should be used to wisely fund a substantial portion of the elimination of the US Government Sequester Cost Cuts over the next several years which are now being negotiated by 29 US Congressional members of the Bicameral Committee Conference on Budget Negotiations. Both clear-thinking Republicans and clear-thinking Democrats should be on board with this wise funding vehicle.