|mils $s||mils $s|
|New York Hospital Organizations|
|New York and Presbyterian Hospital||New York||Dec 2012||326||3,848||8.5%|
|Sloan-Kettering Cancer Center||New York||Dec 2012||295||2,789||10.6%|
|North Shore Long Island Jewish Health||Great Neck||Dec 2012||262||6,702||3.9%|
|NYU Hospitals Center||New York||Aug 2012||219||1,989||11.0%|
|Mount Sinai Hospital||New York||Dec 2012||178||1,773||10.0%|
|Montefiore Medical Center||New York||Dec 2012||163||3,084||5.3%|
|Icahn School Medicine Mount Sinai||New York||Dec 2012||119||1,578||7.5%|
|Catholic Health Services Long Island||Rockville Centre||Dec 2012||53||2,056||2.6%|
|St Peter's Health Partners||Albany||Dec 2012||53||1,070||5.0%|
|Hospital For Special Surgery||New York||Dec 2012||34||766||4.4%|
|Albany Medical Center||Albany||Dec 2012||31||935||3.3%|
|Total all 11||1,733||26,590||6.5%|
As you can see in the above chart, the Total Bottom Line Profits for these 11 New York Non-Profit Hospital Organizations was $1.733 bil in the most recent audited fiscal year reported, which was a very solid 6.5% of Total Operating Revenues in the same period. 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.
So how have these New York Non-Profit Hospital Organizations done on the earnings front for the entire period of the Obama Administration so far?
A Non-Profit Hospital Organization's Net Assets, or its Excess of Total Assets over Total Liabilities, results overwhelmingly from the accumulated Tax-free Bottom Line Profits over time.
I could find the audited financial statements of Albany, NY-based St. Peter's Health Partners for only the current fiscal year. The remaining 10 New York Non-Profit Hospital Organizations had their Total Net Assets increase from $9.077 bil at the beginning of the Obama Administration to $16.902 bil at the most recent date reported, an increase of $7.082 bil, or up a massive 86% over this average 4.38 year period. Thus for this 4.38 year period, these 10 New York Non-Profit Hospital Organizations generated a Total Average Annual Bottom Line Income of $1.787 bil, higher than the comparable Total Bottom Line Income just in the current fiscal year of $1.680 bil.
So these New York Non-Profit Hospital Organizations have had a very solid earnings performance so far during the Obama Administration.
These very solid bottom line profits of these New York Non-Profit Hospital Organizations were attributable to superb fiscal measures and much more effective health care delivery adopted by hospital executives and hospital employees, which were initiated in conjunction with Obamacare. In addition, the strong US stock market and lower interest rates added to investment returns and thus also to bottom line profits of these Hospital Organizations.
But there's much more to this positive earnings story.
When the Insurance Exchanges and Medicaid Expansion both kick in in the State of New York starting in 2014, these New York Non-Profit Hospital Organizations should see their profits increase even more......and by quite a bit more.
Under the Affordable Care Act (ACA), Hospital Organizations' both future Hospital Operating Income and future 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.
Bottom Line Income is a combination of Hospital Operating Income and Non-Operating Income, with the latter being predominantly Investment Returns on Stocks and Bonds.
There are specifically two items which will drive higher Hospital Organization profits due to the ACA and also especially due to US States electing the Expansion of Medicaid.
First, there is the Hospital Operating Statement Provision for Bad Debts' earnings charge which will be dramatically reduced due to the substantially better insurance situation of hospital patients due to the ACA. 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 due to the much improved insurance situation of hospital patients. This Estimated Costs for Uncompensated Charity Care is usually 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 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 10 New York Non-Profit Hospital Organizations which had Net Assets above $400 mil currently. I excluded below the Icahn School of Medicine at Mount Sinai. And I added to these 10 the 4 New York Non-Profit Hospital Organizations I found which had current year Revenues above $1 bil, but with current Net Assets below $400 bil:
|mils $s||mils $s||mils $s||mils $s|
|New York Hospital Organizations|
|New York City Health & Hospitals||Jun 2012||592||643||1,235||(348)|
|North Shore Long Island Jewish Health||Dec 2012||98||135||233||98|
|St. Luke's Roosevelt Hospital||Dec 2012||74||14||88||10|
|New York and Presbyterian Hospital||Dec 2012||44||33||77||195|
|Montefiore Medical Center||Dec 2012||16||51||67||100|
|Mount Sinai Hospital||Dec 2012||24||39||63||79|
|Catholic Health Services Long Island||Dec 2012||31||19||50||53|
|St Peter's Health Partners||Dec 2012||41||9||50||31|
|NYU Hospitals Center||Aug 2012||27||7||34||249|
|Sloan-Kettering Cancer Center||Dec 2012||18||14||32||91|
|Winthrop University Hospital Association||Dec 2012||25||7||32||18|
|Kaleida Health Buffalo||Dec 2012||22||8||30||16|
|Albany Medical Center||Dec 2012||18||9||27||14|
|Hospital For Special Surgery||Dec 2012||6||4||10||33|
|Total all 14||1,036||992||2,028||639|
|Provision for Bad Debts||1,036|
|Uncompensated Charity Care Costs||992|
|Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs||2,667|
So, these 14 New York Non-Profit Hospital Organizations had Audited Total Hospital Operating Income of $639 mil in the most recent fiscal year audited. Driving down this $639 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $1.036 bil and Total Costs of Uncompensated Charity Care of another $992 mil, with the predominant driver of these two earnings charges being the New York City Health and Hospitals Corporation. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $2.667 bil, which is $2.028 bil higher than the reported $639 mil.
Granted these two earnings charges will not be totally eliminated with the ACA and in combination with States like New York choosing to Expand Medicaid, but a substantial amount of these two earnings charges will be eliminated, and especially so because New York elected to Expand Medicaid, which is the predominant driver of these two earnings charges being very substantially reduced.
And the above two large earnings charges are just for one year.
It is pretty clear why New York astutely chose to Expand Medicaid, especially since the US Government is 100% funding the first three years of Medicaid Expansion.
With these strong, ongoing New York Non-Profit Hospital earnings under Obamacare, the ultimate result should be a significant reduction in hospital patient charges, a significant bending back of the US Long-term Total Health Care Cost Curve and a significant 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 several years which are now being negotiated by 29 US Congressional members of the Bicameral Committee Conference on Budget Negotiations. Both clear-thinking Republicans and clear-thinking Democrats should be on board with this wise funding vehicle.