|mils $s||mils $s|
|New Jersey Non-Profit Hospital Organizations|
|Barnabas Health||West Orange||Dec 2012||171||2,530||6.8%|
|Virtua Health||Marlton||Dec 2012||130||1,137||11.4%|
|Robert W Johnson Univ Hosp||New Brunswick||Dec 2012||79||780||10.1%|
|AHS Hospital||Morristown||Dec 2012||75||1,498||5.0%|
|Meridian Hospitals||Red Bank||Dec 2012||65||1,361||4.8%|
|Hackensack Univ Medical Ctr||Hackensack||Dec 2012||57||1,348||4.2%|
|AtlantiCare Regional Med Ctr||Galloway||Dec 2012||57||644||8.9%|
|Total all 7||634||9,298||6.8%|
As you can see in the above chart, the Total Bottom Line Profits for these 7 New Jersey Non-Profit Hospital Organizations was $634 mil in the most recent audited fiscal year reported, which was a robust 6.8% of Total Operating Revenues. As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies was 9.6% of their Total Revenues in the most recent year.
When you compare the 6.8% Total Bottom Line Profit Margin of these 7 New Jersey 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 New Jersey Non-Profit Hospital Organizations in the most recent year were very solid.
OK, so how much earnings progress have these New Jersey Non-Profit Hospital Organizations made in 2013? All 7 of these have December fiscal year ends. From EMMA, these 7 New Jersey Non-Profit Hospital Organizations generated Total Bottom Line Profits of $505 mil in the year-to-date 2013 interim periods disclosed in EMMA, which was up 12% from the prior year comparable periods, as you can see in the following chart:
|mils $s||mils $s||Amount||%|
|New Jersey Hospital Organizations|
|Barnabas Health||West Orange||9 Months Sept||133||132||1||1%|
|Virtua Health||Marlton||6 Months Jun||86||76||10||13%|
|Robert W Johnson Univ Hosp||New Brunswick||9 Months Sept||66||64||2||3%|
|Meridian Hospitals||Red Bank||9 Months Sept||62||47||15||32%|
|AHS Hospital||Morristown||9 Months Sept||57||42||15||36%|
|AtlantiCare Regional Med Ctr||Galloway||9 Months Sept||54||43||11||26%|
|Hackensack Univ Medical Ctr||Hackensack||9 Months Sept||50||51||(1)||-2%|
|Total all 7||508||455||53||12%|
Under the Affordable Care Act (ACA), Hospital Organizations' both future Hospital Operating Income and Bottom Line Income will be bolstered very 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 like New Jersey, 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 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 the 7 New Jersey Hospital Organizations which had Net Assets above $400 mil currently.
|mils $s||mils $s||mils $s||mils $s|
|New Jersey Hospital Organizations|
|Barnabas Health||West Orange||Dec 2012||109||110||219||150|
|AHS Hospital||Morristown||Dec 2012||55||151||206||59|
|Hackensack Univ Medical Ctr||Hackensack||Dec 2012||80||74||154||57|
|Meridian Hospitals||Red Bank||Dec 2012||72||59||131||53|
|Virtua Health||Marlton||Dec 2012||52||49||101||47|
|AtlantiCare Regnl Med Ctr||Galloway||Dec 2012||39||49||88||20|
|Robert W Johnson Univ Hosp||New Brunswick||Dec 2012||43||36||79||27|
|Total all 7||450||528||978||413|
|Provision for Bad Debts||450|
|Estimated Costs of Uncompensated Charity Care||528|
|Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs||1,391|
So, these 7 New Jersey Hospital Organizations had Audited Total Hospital Operating Income of $413 mil in the most recent fiscal year. Driving down this $413 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $450 mil and Total Costs of Uncompensated Charity Care of another $528 mil. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $1.391 bil, which is $978 mil higher than the reported $413 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 if States elect to Expand Medicaid like New Jersey is, 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.
Lastly, it is just incredible how much the financial strength of these New Jersey Non-Profit Hospitals has been enhanced during the Obama Administration.
From EMMA, below here are the Net Assets of these 7 New Jersey Non-Profit Hospital Organizations at June 30, 2013 and also at December 31, 2008, just prior to the beginning of the Obama Administration:
|mil $s||mil $s|
|Virtua Health||Marlton||NJ||Jun 13||1,035||Dec 08||566||83%|
|AHS (Atlantic Health System) Hospital||Morristown||NJ||Jun 13||966||Dec 08||510||89%|
|Robert Wood Johnson University Hospital||New Brunswick||NJ||Jun 13||765||Dec 08||457||67%|
|Meridian Hospitals||Red Bank||NJ||Jun 13||757||Dec 08||339||123%|
|Hackensack University Medical Center||Hackensack||NJ||Jun 13||593||Dec 08||297||100%|
|Barnabus Health||West Orange||NJ||Jun 13||515||Dec 08||(290)||278%|
|AtlantiCare Regional Medical Center||Galloway||NJ||Jun 13||435||Dec 08||262||66%|
|Total all 7||5,066||2,141||137%|
Yeah, these 7 New Jersey Non-Profit Hospital Organizations had their Total Net Assets increase by $2.925 bil to $5.066 bil, an increase of a massive 137% during the Obama Administration so far. This $2.925 bil Net Asset increase comes predominantly from the tax-free cumulative earnings of these New Jersey Non-Profit Hospitals during the Obama Administration.