Wednesday, November 20, 2013

Massachusetts Non-Profit Hospital Solid Earnings Growth and Operating Well Under Obama/Romney Care

From a review of the Electronic Municipal Market Access (EMMA), I found 11 Non-Profit Hospital Organizations headquartered in the State of Massachusetts 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 Massachusetts Non-Profit Hospital Organizations:


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
Massachusetts Non-Profit Hospital Organizations

Partners HealthCare Boston Sep 2012          352               264            88 33%
Children's Med Ctr & Hospital Boston Sep 2012          101                 89            12 13%
CareGroup HealthCare Boston Sep 2012            95                 70            25 36%
Baystate Health Springfield Sep 2012            93                 21            72 343%
Lahey Clinic Medical Center Burlington Sep 2012            55                 60             (5) -8%
UMass Memorial HealthCare Worchester Sep 2012            53                 30            23 77%
Cape Cod Healthcare Hyannis Sep 2012            53                 40            13 33%
SouthCoast Health New Medford Sep 2012            35                 32              3 9%
Covenant Health Lexington Dec 2012            30                 25              5 20%
Dana-Farber Cancer  Boston Sep 2012            23                  (8)            31 388%
Boston Med Ctr & Affiliates Boston Sep 2012             (7)                 77           (84) -109%

Total all 11

         883               700          183 26%

So that's very nice 26% Total Earnings Growth for annual fiscal year 2012 over 2011.

What about more recently?

Well, of the 11 Massachusetts Hospital Organizations, 10 of them have the same September fiscal year ends.  So below here are the Bottom Line Profits in the most recently reported 9 Months ended June 30th interim periods of both of the most recent two years for each of these 10 Massachusetts Non-Profit Hospital Organizations:

9 Mos 9 Mos

Jun Jun

2013 2012

Bottom Bottom

Line Line Increase Increase

Net Net (Decrease) (Decrease)

Income Income Amount %

mils $s mils $s mils $s
Massachusetts Non-Profit Hospital Organizations

Partners HealthCare Boston
         287               319           (32) -10%
Children's Med Ctr & Hospital Boston
         242                 72          170 236%
CareGroup HealthCare Boston
         108                 62            46 74%
Dana-Farber Cancer Parent Only  Boston
           44                 18            26 144%
Boston Med Ctr & Affiliates Boston
           15                   2            13 650%
UMass Memorial HealthCare Worchester
           49                 11            38 345%
SouthCoast Health New Medford
           12                 19             (7) -37%
Lahey Clinic Medical Center Burlington
           35                 52           (17) -33%
Baystate Medical Center Springfield
           68                 71             (3) -4%
Cape Cod Healthcare Hyannis
           22                 53           (31) -58%

Total all 10

         882               679          203 30%

Ahh, so very similar 30% Total Earnings Growth for the 9 Months Ended June 30, 2013.

I like this very nice Goldilocks Total Earnings Growth consistency in the most recent 1 and 3/4ths years.  Even though the stock market has done wonders in adding to these Massachusetts Non-Profit Hospital Organizations' Bottom Line Profits, it appears that they have for the most part unselfishly shared some of this massive economic largesse with their hospital patients.

And this salient point is shown 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 11 Massachusetts Non-Profit Hospital Organizations:


Line Total Profit

City Net Operating Margin

HQs Income Revenues %

mils $s mils $s
Massachusetts Non-Profit Hospital Organizations

Partners HealthCare Boston
         352             8,981 3.9%
Children's Med Ctr & Subsidiaries Boston
         229             1,769 12.9%
CareGroup HealthCare Boston
           95             2,449 3.9%
Baystate Health Springfield
           93             1,631 5.7%
Lahey Clinic Medical Center Burlington
           55             1,036 5.3%
UMass Memorial HealthCare Worchester
           53             2,224 2.4%
Cape Cod Healthcare Hyannis
           53               680 7.8%
SouthCoast Health New Medford
           35               790 4.4%
Covenant Health Lexington
           30               581 5.2%
Dana-Farber Cancer  Boston
           23               993 2.3%
Boston Med Ctr & Affiliates Boston
            (7)             2,245 -0.3%

Total all 11

      1,011           23,379 4.3%

Yeah, that's a Total Profit Margin as a % of Total Operating Revenues of 4.3% in the 2012 annual fiscal year.  And with the nice earnings growth in the most recent 9 months, the Total Profit Margin was 5.4% in the 9 months ended June 30, 2013.

This is precisely where the country should be under Obamacare.....Profit Margin % in the 4.3% to 5.4% range.  Instead, all throughout the country, there are so many Non-Profit Hospital Systems with very high single-digit and even many double-digit Total Profit Margin Percentages.  These Hospital Organizations are doing nothing to bend back the Total US Health Care Cost Curve.  Instead of sharing their stock market and lower interest rate economic largesse with their hospital patients, they instead are selfishly padding their Bottom Line Profits and adding to their already massive treasure chest Investment Portfolio in Equity and Debt Instruments.

Granted in large part to the benefits of Obamacare, Total US Health Care Costs' annual increases have substantially moderated since 2010, but to take it to a completely different level and substantially reduce Total US Health Care Costs and also the US Debt load even more, the rest of the country's hospitals should follow the lead of the Massachusetts' Non-Profit Hospitals.  With Romneycare and now Obamacare, they have had a longer time to get it right.  They have made great strides in both more efficient and more effective health care delivery.  And they also haven't been selfish in generating excess profits.  They understand that they are Non-Profit Organizations, unlike so many other very greedy "Non-Profit" Hospital Organizations all throughout the country.

And yeah, the US Congress has done absolutely nothing to change this horrible situation.  Instead, by their actions, they have encouraged and fostered it.  Nearly all of them do whatever the much too strong Hospital Lobby requests, even though it severely harms economically both the hospital patient and the US Government Debt load.

And the worst offenders of all in this regard?  Clearly all of the Medical Doctors in the US Congress.  They claim they are strident US Deficit Hawks.  But in reality, they are beholden to the Hospital Lobby.  And they need to all be replaced by candidates who can understand a financial statement.