From a review of the Electronic Municipal Market Access (EMMA), I found 5 Non-Profit Hospital Organizations headquartered in the State of Montana with Net Assets at the most recent date reported of more than $100 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 5 Montana 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 | ||||
| Montana Non-Profit Hospital Organizations | |||||
| Kalispell Regional Medical Ctr | Kalispell | Mar 2013 | 19 | 236 | 8.1% |
| Benefis Health | Great Falls | Dec 2012 | 17 | 341 | 5.0% |
| Bozeman Deaconess Health | Bozeman | Dec 2012 | 16 | 192 | 8.3% |
| Providence Health in Montana | Western Montana | Dec 2012 | 15 | 301 | 5.0% |
| St. Peters Hospital | Helena | May 2013 | 14 | 157 | 8.9% |
| Total all 5 | 81 | 1,227 | 6.6% | ||
As you can see in the above chart, the Total Bottom Line Profits for these 5 Montana Non-Profit Hospital Organizations was $81 mil in the most recent audited fiscal year reported, which was a robust 6.6% 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.
And below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of these 5 Montana 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 | ||||
| Montana Non-Profit Hospital Organizations | ||||||
| Kalispell Regional Medical Ctr | Kalispell | Mar 2013 | 19 | 7 | 12 | 171% |
| Benefis Health | Great Falls | Dec 2012 | 17 | 15 | 2 | 13% |
| Bozeman Deaconess Health | Bozeman | Dec 2012 | 16 | 19 | (3) | -16% |
| Providence Health in Montana | Western Montana | Dec 2012 | 15 | 16 | (1) | -6% |
| St. Peters Hospital | Helena | May 2013 | 14 | 6 | 8 | 133% |
| Total all 5 | 81 | 63 | 18 | 29% | ||
Yeah, these 5 Montana Non-Profit Hospital Organizations generated Total Bottom Line Profits of $81 mil in the most recent fiscal year, which was a robust 29% increase over the previous fiscal year.
But there's more to this earnings story.
When the Insurance Exchanges kick in starting in 2014, these Montana Non-Profit Hospital Organizations should see their profits increase by quite a bit.
Under the Affordable Care Act (ACA), Hospital Organizations' both future Hospital Operating 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 for Hospital Organizations operating hospitals in States electing to Expand Medicaid, this future Profit growth will be exceptionally robust.
There are specifically two items which will drive higher Hospital Organization profits due to the ACA and also especially due to States electing the Expansion of Medicaid.
First, there is the Operating Statement Provision for Bad Debts' earnings charge which will be dramatically reduced due to the substantially better insurance situation of hospital patients. This Provision for Bad Debts' earnings charge is usually a separate report line on a Hospital Organization's audited Operating Statement.
And second, there is the Operating Statement Uncompensated Charity Care Costs' earnings charge for the amounts hospitals spend on charity care which will also be dramatically reduced. This Estimated Costs for Uncompensated Charity Care is disclosed in a Hospital Organization's footnotes which accompany its audited financial statements.
So what about the amounts of these two items? Well, they are large when compared to the related Hospital Operating Income.
Below here are the most recent audited year's Provision for Bad Debts and Uncompensated Charity Care Costs for each of these 5 Montana Non-Profit Hospital Organizations with Net Assets above $100 mil:
| One Year | One | |||||
| One Year | Estimated | Year | One | |||
| Most | Provision | Cost of | Total | Year | ||
| Recent | For | Uncompensated | Earnings | Hospital | ||
| City | Annual | Bad | Charity | Charge | Operating | |
| HQs | FYE | Debts | Care | of Both | Income | |
| mils $s | mils $s | mils $s | mils $s | |||
| Montana Non-Profit Hospital Organizations | ||||||
| Benefis Health | Great Falls | Dec 2012 | 27 | 6 | 33 | 14 |
| Kalispell Regional Medical Ctr | Kalispell | Mar 2013 | 12 | 8 | 20 | 12 |
| Bozeman Deaconess Health | Bozeman | Dec 2012 | 11 | 8 | 19 | 13 |
| St. Peters Hospital | Helena | May 2012 | 9 | 8 | 17 | 3 |
| Providence Health in Montana | Western Montana | Dec 2012 | 16 | - | 16 | 13 |
| Total all 5 | 75 | 30 | 105 | 55 | ||
| Provision for Bad Debts | 75 | |||||
| Uncompensated Charity Care Costs | 30 | |||||
| Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs | 160 | |||||
So, these 5 Montana Non-Profit Hospital Organizations had Audited Total Hospital Operating Income of $55 mil in the most recent fiscal year audited. Severely burdening this $55 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $75 mil and Total Costs of Uncompensated Charity Care of another $30 mil. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $160 mil, which is $105 mil higher than the reported $55 mil Hospital Operating Income.
Granted these two earnings charges will not be totally eliminated with the full rollout of the ACA, but a substantial amount of these two earnings charges will be eliminated, and especially so for States electing to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.
