Wednesday, November 13, 2013

Delaware Non-Profit Hospital Earnings On Fire Under Obamacare and Headed Much Higher

From a review of the Electronic Municipal Market Access (EMMA), I found 2 Non-Profit Hospital Organizations headquartered in the State of Delaware with Net Assets at the most recent date reported of more than $400 mil each.  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 these 2 Delaware Non-Profit Hospital Organizations:



Annual Bottom

Fiscal Line Total Profit

City Year Net Operating Margin

HQs End Income Revenues %

mils $s mils $s
Delaware Hospital Organizations

Christiana Care Health Services Wilmington Jun 2012          108             1,383 7.8%
BayHealth Medical Center Dover Jun 2013            74               482 15.4%

Total of both

         182             1,865 9.8%

As you can see in the above chart, the Total Bottom Line Profits for these 2 Delaware Non-Profit Hospital Organizations was $182 mil in the most recent audited fiscal year reported, which was a very robust 9.8% of Total Operating Revenues.  But it gets even better on the profit front.  Christiana Care Health Services hasn't reported its fiscal year end June 2013 audited operating results yet, but for the 9 months ended March 2013, it generated Bottom Line Earnings of $161 mil on Total Operating Revenues of $1.067, for a Profit Margin of 15.1% nearly double the 7.8% Profit Margin in its fiscal year ended June 2012.  Whew!

As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies was a substantially lower 9.6% of their Total Revenues in the most recent year.  CEOs and CFOs of the 30 Dow Industrial companies keenly aware of how difficult it is for them to generate profit margin percentages must be in utter disbelief at how Non-Profit Hospitals can possibly be doing so well on the profit margin percentage front.

When you compare the very robust Total Bottom Line Profit Margin of these 2 Delaware 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 Delaware Non-Profit Hospital Organizations in the most recent year were on fire.

But it also reveals a main reason why the US Health Care Costs are so much out of control.....Hospitals charge way too much and retain these excess charges in their Bottom Line Profits which get added to their massive treasure chest of Investments in Stocks and Bonds.  And the US Congress, both Republicans and Democrats, nearly all 100% subservient to Hospitals, just sits there and twiddles its thumbs and refuses to work together for the common good of the country.  With this complete lack of governance, coupled with consistently choosing Hospitals over People, it's no wonder why the approval rating of the US Congress is now less than 10%.

These very strong bottom line profits of these 2 Delaware 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.

But there's even more to this incredibly massive earnings story.

When the Insurance Exchanges kick in starting in 2014, these Delaware 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 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.

With these very exceptionally strong, ongoing Delaware 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 Bilater and Bicameral Committee Conference on Budget Negotiations.  Both clear-thinking Republicans and clear-thinking Democrats should be on board with this wise funding vehicle.     

And lastly, it is just incredible how much the financial strength of these Delaware Non-Profit Hospitals has been enhanced during the Obama Administration.

From EMMA, below here are the Net Assets of these 2 Delaware Non-Profit Hospital Organizations at the most recent date and also at the beginning of the Obama Administration:

2008 2008 Obama

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

Christiana Care Health Services Wilmington DE Sep 13     1,605
Jun 09        881 82%
BayHealth Medical Center Dover DE Jun 13        526
Jun 09        276 91%

Total of both


     1,157 84%

Yeah, these 2 Delaware Non-Profit Hospital Organizations had their Total Net Assets increase by a huge $974 mil to $2.131 bil, an increase of a huge 84% during the Obama Administration so far.  This $974 mil Net Asset increase comes predominantly from the tax-free cumulative earnings of these Delaware Hospitals during the Obama Administration.