Ohio Non-Profit Hospital Earnings On Fire Under Obamacare and Headed Much Higher.....An Update

From a review of the Electronic Municipal Market Access (EMMA), I found 14 Non-Profit Hospital Organizations headquartered in the State of Ohio with Net Assets at the most recent date reported of more than $400 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 14 Ohio 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
Ohio Non-Profit Hospital Organizations
Cleveland Clinic Health System	Cleveland	Dec 2012	685	6,215	11.0%
OhioHealth	Columbus	Jun 2013	380	2,529	15.0%
Catholic Health Partners	Cincinnati	Dec 2012	303	3,819	7.9%
Nationwide Children's Hospital	Columbus	Dec 2012	209	1,489	14.0%
ProMedica Health Care	Toledo	Dec 2012	202	1,418	14.2%
Mount Carmel Health System	Columbus	Jun 2013	132	1,464	9.0%
Children's Hospital	Cincinnati	Jun 2012	129	1,852	7.0%
Premier Health Partners	Dayton	Dec 2012	100	1,846	5.4%
Summa Health System	Akron	Dec 2012	56	1,359	4.1%
University Hospitals Health System	Cleveland	Dec 2012	54	2,266	2.4%
Children's Hospital Medical Center	Akron	Dec 2012	47	580	8.1%
Kettering Health Network	Dayton	Dec 2012	46	1,228	3.7%
UC Health	Cincinnati	Jun 2013	26	1,206	2.2%
Christ Hospital Health Network	Cincinnati	Jun 2013	17	762	2.2%
Total all 14			2,386	28,033	8.5%

Note: Columbus-based Mount Carmel Health System is part of the Livonia, Michigan-headquartered Trinity Health.

As you can see in the above chart, the Total Bottom Line Profits for these 14 Ohio Non-Profit Hospital Organizations was $2.386 bil in the most recent audited fiscal year reported, which was a very robust 8.5% of Total Operating Revenues.  As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies was just a little bit higher 9.6% of their Total Revenues in the most recent year.  CEOs and CFOs of the 30 Dow Industrial companies keenly aware of how difficult it is for them to generate profit margin percentages must be in utter disbelief at how Non-Profit Hospitals can possibly be doing so well on the profit margin percentage front.

When you compare the 8.5% Total Bottom Line Profit Margin of these 14 Ohio 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 Ohio Non-Profit Hospital Organizations in the most recent year were on fire.

But it also reveals a main reason why the US Health Care Costs are so much out of control.....Hospitals charge way too much and retain these excess charges in their Bottom Line Profits which get added to their massive treasure chest of Investments in Stocks and Bonds.  And the US Congress, both Republicans and Democrats, nearly all 100% subservient to Hospitals, just sits there and twiddles its thumbs and refuses to work together for the common good of the country.  With this complete lack of governance, coupled with consistently choosing Hospitals over People, it's no wonder why the approval rating of the US Congress is now less than 10%.

OK, so how have they done even more recently?  Of these 14 Ohio Non-Profit Hospital Organizations, there were 8 of them which had December 2012 fiscal year ends and which disclosed their first half ended June 30, 2013 operating results in EMMA.  These 8, led by the top-of-breed Cleveland Clinic, generated Total Bottom Line Profits of $836 mil in the first half of 2013, which was an increase of a very robust 32% over the first half of 2012, as you can see in the following chart:

		1st Half	1st Half
		2013	2012
		Bottom	Bottom
		Line	Line
	City	Net	Net	Increase	Increase
	HQs	Income	Income	(Decrease)	(Decrease)
		mils $s	mils $s	Amount	%
Ohio Hospital Organizations
Cleveland Clinic Health System	Cleveland	347	277	70	25%
Nationwide Children's Hospital	Columbus	134	98	36	37%
Catholic Health Partners	Cincinnati	104	125	(21)	-17%
University Hospitals Health System	Cleveland	96	7	89	1271%
ProMedica Health Care	Toledo	88	90	(2)	-2%
Kettering Health Network	Dayton	34	6	28	467%
Children's Hospital Medical Center	Akron	21	17	4	24%
Summa Health System	Akron	12	14	(2)	-14%
Total all 8		836	634	202	32%

These very strong bottom line profits of these Ohio 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 even more to this incredibly positive earnings story.

When the Insurance Exchanges kick in starting in 2014, these Ohio 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 robustly due to many of the Uninsured getting insurance and also due to the many of the Underinsured getting much better insurance.  The financially savvy Ohio Republican Governor John Kasich is playing a very pivotal role here by his very proactive push to Expand Medicaid in Ohio, which will dramatically increase the profits of all Ohio Hospitals by substantially reducing the huge earnings charges related to both Bad Debts and Charity Care.

With these very strong, ongoing Ohio 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. 

It is just incredible how much the financial strength of these Ohio Non-Profit Hospitals has been enhanced during the Obama Administration.

From EMMA, below here are the Net Assets of these 14 Ohio Non-Profit Hospitals 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	%
Ohio Hospital Organization	HQs	HQs	Date	Assets		Date	Assets	Change
				mil $s			mil $s
Cleveland Clinic Health System	Cleveland	OH	Jun 13	5,392		Dec 08	2,715	99%
Catholic Health Partners	Cincinnati	OH	Jun 13	2,636		Dec 08	1,614	63%
OhioHealth	Columbus	OH	Jun 13	2,613		Jun 09	1,259	108%
Nationwide Children's Hosital	Columbus	OH	Jun 13	1,572		Dec 08	761	107%
ProMedica Health Care	Toledo	OH	Jun 13	1,485		Dec 08	1,042	43%
Children's Hospital Cincinnati	Cincinnati	OH	Jun 12	1,476		Jun 09	1,140	29%
University Hospitals Health System	Cleveland	OH	Jun 13	1,454		Dec 08	1,078	35%
Premier Health Partners	Dayton	OH	Dec12	1,409		Dec 08	1,111	27%
Mount Carmel Health	Columbus	OH	Jun 13	1,238		Jun 09	850	46%
Kettering Health Network	Dayton	OH	Jun 13	699		Dec 08	340	106%
Summa Health System	Akron	OH	Jun 13	618		Dec 08	407	52%
UC Health (Cincinnati)	Cincinnati	OH	Jun 13	592		Jun 09	415	43%
Children's Hospital Med Center Akron	Akron	OH	Jun 13	435		Dec 08	247	76%
Christ Hospital Health Network	Cincinnati	OH	Jun 13	430		Jun 10	289	49%
Total all 14				22,049			13,268	66%

Yeah, these 14 Ohio Non-Profit Hospital Organizations had their Total Net Assets increase by a massive $8.781 bil to $22.049 bil, an increase of 66% during the Obama Administration so far.  This $8.781 bil Net Asset increase comes predominantly from the tax-free cumulative earnings of these Ohio Hospitals during the Obama Administration.