Maryland Non-Profit Hospital Earnings Up 357% Under Obamacare and Headed Substantially Higher

From a review of the Electronic Municipal Market Access (EMMA), I found 5 Non-Profit Hospital Organizations headquartered in the State of Maryland with Net Assets at the most recent date reported of more than $400 mil each.  Below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of these Maryland 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
Maryland Non-Profit Hospital Organizations
Johns Hopkins Health	Baltimore	Jun 2013	350	(6)	356	5933%
MedStar Health	Columbia	Jun 2013	186	70	116	166%
Bon Secours Health	Baltimore	Aug 2013	171	115	56	49%
Univ Maryland Medical	Baltimore	Jun 2013	84	(23)	107	465%
LifeBridge Health	Baltimore	Jun 2013	54	29	25	86%
Total all 5			845	185	660	357%

Yeah, these 5 Maryland Non-Profit Hospital Organizations, led by the prestigious Johns Hopkins Health System, generated Total Bottom Line Profits of $845 mil in the most recent fiscal year, which was a $660 mil increase, or an off-the-charts 357% 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 Maryland 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
Maryland Non-Profit Hospital Organizations
Johns Hopkins Health	Baltimore	Jun 2013	350	4,960	7.1%
MedStar Health	Columbia	Jun 2013	186	4,217	4.4%
Bon Secours Health	Baltimore	Aug 2013	171	3,357	5.1%
Univ Maryland Medical	Baltimore	Jun 2013	84	2,571	3.3%
LifeBridge Health	Baltimore	Jun 2013	54	1,035	5.2%
Total all 5			845	16,140	5.2%

As you can see in the above chart, the Total Bottom Line Profits for these 5 Maryland Non-Profit Hospital Organizations was $845 mil in the most recent audited fiscal year reported, which was a very reasonable 5.2% 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 Maryland 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 Maryland is wisely Expanding Medicaid, the profits of all Maryland 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 these 5 Maryland Non-Profit Hospital Organizations which had Net Assets above $400 mil currently:

				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
Maryland Non-Profit Hospital Organizations
Bon Secours Health		Aug 2013	216	151	367	124
MedStar Health		Jun 2013	215	52	267	79
Univ Maryland Medical		Jun 2013	153	98	251	(14)
Johns Hopkins Health		Jun 2013	144	65	209	176
LifeBridge Health		June 2012	44	16	60	23
Total all 5			772	382	1,154	388
Provision for Bad Debts						772
Uncompensated Charity Care Costs						382
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						1,542

So, these 5 Maryland Hospital Organizations had Audited Total Hospital Operating Income of $388 mil in the most recent fiscal year.  Driving down this $388 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $772 mil and Total Costs of Uncompensated Charity Care of another $382 mil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $1.542 bil, which is $1.154 bil higher than the reported $388 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 Maryland 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 Maryland 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.  

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

From EMMA, below here are the Net Assets of these 5 Maryland Non-Profit Hospital Organizations at the most recent date and also at the beginning of the Obama Administration:

						2008	2008	Obama
				Most		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
Johns Hopkins Health System	Baltimore	MD	Sep 13	3,551		Jun 09	1,273	179%
University Maryland Medical System	Baltimore	MD	Sep 13	1,414		Jun 09	904	56%
MedStar Health	Columbia	MD	Jun 13	1,165		Jun 09	647	80%
Bon Secours Health System	Baltimore	MD	Aug 13	1,180		Aug 09	703	68%
LifeBridge Health	Baltimore	MD	Jun 13	607		Jun 09	406	50%
Total all 5				7,917			3,933	101%

Yeah, these 5 Maryland Non-Profit Hospital Organizations had their Total Net Assets increase by a massive $3.984 bil to $7.917 bil, an increase of a huge 101% during the Obama Administration so far.  This $3.984 bil Net Asset increase comes predominantly from the tax-free cumulative earnings of these Maryland Hospitals during the Obama Administration.