Colorado Non-Profit Hospital Earnings Up 249% Under Obamacare and Headed Substantially Higher

From a review of the Electronic Municipal Market Access (EMMA), I found 9 Non-Profit Hospital Organizations headquartered in the State of Colorado with Net Assets at the most recent date reported of more than $200 mil and also Annual Total Operating Revenues above $200 mil.  University of Colorado Health was formed on July 1, 2012 and thus didn't have previous year amounts and thus was not included below.  Below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of the remaining 8 Colorado Non-Profit Hospital Organizations:

			Most
		Most	Recent	Prior
		Recent	Year	Year
		Annual	Bottom	Bottom
		Fiscal	Line	Line	Increase	Increase
	City	Year	Net	Net	(Decrease)	(Decrease)
	HQs	End	Income	Income	Amount	%
			mils $s	mils $s	mils $s
Colorado Non-Profit Hospital Organizations
Catholic Health Initiatives	Inverness	Jun 2013	490	95	395	416%
Sisters Charity Leavenworth	Denver	Dec 2012	183	38	145	382%
Children's Hospital	Aurora	Dec 2012	105	15	90	600%
Vail Health Services	Vail	Oct 2012	49	44	5	11%
North Colorado Medical Center	Greeley	Dec 2012	31	21	10	48%
Boulder Community Hospital	Boulder	Dec 2012	25	24	1	4%
Parkview Medical Center	Pueblo	Jun 2013	19	11	8	73%
Denver Health & Hospital	Denver	Dec 2012	6	12	(6)	-50%
Total all 8			908	260	648	249%

Yeah, these 8 Colorado Non-Profit Hospital Organizations generated Total Bottom Line Profits of $908 mil in the most recent fiscal year, which was a $648 mil increase, or an off-the-charts 249% increase, over the previous fiscal year. 

And 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 all 9 of these Colorado Non-Profit Hospital Organizations:

		Most
		Recent
		Annual	Bottom
		Fiscal	Line	Total	Profit
	City	Year	Net	Operating	Margin
	HQs	End	Income	Revenues	%
			mils $s	mils $s
Colorado Non-Profit Hospital Organizations
Catholic Health Initiatives	Inverness	Jun 2013	490	10,708	4.6%
University Colorado Health	Ft. Collins	Jun 2013	297	2,321	12.8%
Sisters Charity Leavenworth	Denver	Dec 2012	183	2,223	8.2%
Children's Hospital	Aurora	Dec 2012	105	758	13.9%
Vail Health Services	Vail	Oct 2012	49	214	22.9%
North Colorado Medical Center	Greeley	Dec 2012	31	407	7.6%
Boulder Community Hospital	Boulder	Dec 2012	25	293	8.5%
Parkview Medical Center	Pueblo	Jun 2013	19	298	6.4%
Denver Health & Hospital	Denver	Dec 2012	6	744	0.8%
Total all 9			1,205	17,966	6.7%

As you can see in the above chart, the Total Bottom Line Profits for these 9 Colorado Non-Profit Hospital Organizations was $1.205 bil in the most recent audited fiscal year reported, which was a robust 6.7% of Total Operating Revenues.  As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 For-Profit Dow Industrial companies was 9.6% of their Total Revenues in the most recent year.

But there's substantially more to this earnings story.

When the Insurance Exchanges kick in starting in 2014, these Colorado Non-Profit Hospital Organizations should see their profits increase enormously.

Under the Affordable Care Act (ACA), Hospital Organizations' both future Hospital Operating Income and future Bottom Line Income will be bolstered robustly due to many of the Uninsured getting insurance and also due to the many of the Underinsured getting much better insurance.  And since Colorado is wisely Expanding Medicaid, the profits of all Colorado Hospitals will be substantially increased by reducing the huge earnings charges related to both Bad Debts and Charity Care.

So what about the amounts of these two items.....Bad Debts and Uncompensated Charity Care?  Well, they are very large, especially 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 above 8 Colorado Non-Profit Hospital Organizations other than The Children's Hospital located at Aurora:

				One Year	One
			One Year	Estimated	Year	One
		Most	Provision	Cost of	Total	Year
		Recent	For	Uncompensated	Earnings	Hospital
		Annual	Bad	Charity	Charge	Operating
		FYE	Debts	Care	of Both	Income
			mils $s	mils $s	mils $s	mils $s
Colorado Non-Profit Hospital Organizations
Catholic Health Initiatives	Inverness	Jun 2013	821	321	1,142	(55)
Denver Health & Hospital	Denver	Dec 2012	66	364	430	5
University Colorado Health	Ft. Collins	Jun 2013	162	133	295	270
Sisters Charity Leavenworth	Denver	Dec 2012	94	80	174	57
North Colorado Medical Center	Greeley	Dec 2012	34	24	58	18
Boulder Community Hospital	Boulder	Dec 2012	18	11	29	12
Parkview Medical Center	Pueblo	Jun 2013	27		27	13
Vail Health Services	Vail	Oct 2012	19	1	20	46
Total all 8			1,241	934	2,175	366
Provision for Bad Debts						1,241
Uncompensated Charity Care Costs						934
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						2,541

Note:  Denver Health & Hospital Authority's above Charity Costs amount are Charges Foregone.

So, these 8 Colorado Hospital Organizations had Audited Total Hospital Operating Income of $366 mil in the most recent fiscal year.  Driving down this $366 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $1.241 bil and Total Costs of Uncompensated Charity Care of another $0.934 bil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $2.541 bil, which is $2.175 bil higher than the reported $366 mil.
 
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 since Colorado is presciently electing to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.

And the above two earnings charges are just for one year.

With these very strong, ongoing Colorado Non-Profit Hospital earnings under Obamacare, the ultimate result should be a reduction in hospital patient charges, a bending back of the US Long-term Total Health Care Cost Curve and a 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 say 3 to 4 years which are now being negotiated by 29 US Congressional members of the Bilateral and Bicameral Committee Conference on Budget Negotiations.  Both clear-thinking Republicans and clear-thinking Democrats should be on board with this wise funding vehicle.