|mils $s||mils $s||mils $s|
|Kentucky Non-Profit Hospital Organizations|
|Saint Elizabeth Medical Ctr||Louisville||Dec 2012||132||64||68||106%|
|Baptist Healthcare||Louisville||Aug 2012||96||85||11||13%|
|Norton Healthcare||Louisville||Dec 2012||57||29||28||97%|
|Commonwealth Health||Bowling Green||Mar 2013||34||25||9||36%|
|Ashland Hospital||Ashland||Sep 2012||30||4||26||650%|
|Owensboro Medical Health||Owensboro||May 2013||1||22||(21)||-95%|
|Total all 6||350||229||121||53%|
Yeah, these 6 Kentucky Non-Profit Hospital Organizations generated Total Bottom Line Profits of $350 mil in the most recent fiscal year, which was a $121 mil increase, or a very robust 53% 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 each of these Kentucky Non-Profit Hospital Organizations:
|mils $s||mils $s|
|Kentucky Non-Profit Hospital Organizations|
|Saint Elizabeth Medical Ctr||Louisville||Dec 2012||132||965||13.7%|
|Baptist Healthcare||Louisville||Aug 2012||96||1,647||5.8%|
|Norton Healthcare||Louisville||Dec 2012||57||1,675||3.4%|
|Commonwealth Health||Bowling Green||Mar 2013||34||365||9.3%|
|Ashland Hospital||Ashland||Sep 2012||30||553||5.4%|
|Owensboro Medical Health||Owensboro||May 2013||1||429||0.2%|
|Total all 6||350||5,634||6.2%|
As you can see in the above chart, the Total Bottom Line Profits for these 6 Kentucky Non-Profit Hospital Organizations was $350 mil in the most recent audited fiscal year reported, which was a very solid 6.2% 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 Kentucky Non-Profit Hospital Organizations should see their profits increase by substantially 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. And since Kentucky is wisely Expanding Medicaid, the profits of all Kentucky 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, and especially in States with very high percentages of uninsured and underinsured citizens like Kentucky.
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 these 6 Kentucky Non-Profit Hospital Organizations which had Net Assets above $200 mil currently. And I added an estimate of the Huge KentuckyOne Health based on its 18% Total Operating Revenues portion of Catholic Health Initiative's Consolidated Total Operating Revenues.
|mils $s||mils $s||mils $s||mils $s|
|Kentucky Hospital Organizations|
|KentuckyOne Health||June 2013||148||58||206||(10)|
|Baptist Healthcare||Aug 2012||60||61||121||23|
|Norton Healthcare||Dec 2012||79||20||99||19|
|Saint Elizabeth Medical Ctr||Dec 2012||56||33||89||65|
|Ashland Hospital||Sep 2012||57||21||78||10|
|Owensboro Medical Health||May 2013||33||14||47||(20)|
|Commonwealth Health||Mar 2013||25||16||41||29|
|Total all 7||458||223||681||116|
|Provision for Bad Debts||458|
|Uncompensated Charity Care Costs||223|
|Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs||797|
So, these 7 Kentucky Hospital Organizations had Audited Total Hospital Operating Income of $116 mil in the most recent fiscal year. Driving down this $116 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $458 mil and Total Costs of Uncompensated Charity Care of another $223 mil. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $797 mil, which is $681 mil higher than the reported $116 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 Kentucky is 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 Kentucky 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.