| Most | |||||
| Recent | |||||
| Annual | Bottom | ||||
| Fiscal | Line | Total | Profit | ||
| City | Year | Net | Operating | Margin | |
| HQs | End | Income | Revenues | % | |
| mils $s | mils $s | ||||
| Oklahoma Non-Profit Hospital Organizations | |||||
| Saint Francis Health | Tulsa | Jun 2013 | 186 | 1,060 | 17.5% |
| Integris Health | Oklahoma City | Jun 2013 | 99 | 1,327 | 7.5% |
| St John Health | Tulsa | Sep 2012 | 55 | 977 | 5.6% |
| Total all 3 | 340 | 3,364 | 10.1% | ||
As you can see in the above chart, the Total Bottom Line Profits for these 3 Oklahoma Non-Profit Hospital Organizations was $340 mil in the most recent audited fiscal year reported, which was an exceptionally robust 10.1% of Total Operating Revenues. As a comparison, the Combined Bottom Line Profit Margin of the prestigious 30 Dow Industrial companies is a much lower 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 shaking their heads at how Non-Profit Hospitals can be doing so well on the profit margin percentage front.
When you compare the 10.1% Total Bottom Line Profit Margin of these 3 Oklahoma 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 Oklahoma 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%.
These exceptionally strong bottom line profits of these 3 Oklahoma 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 more to this incredibly massive earnings story.
Below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of these Oklahoma 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 | ||||
| Oklahoma Non-Profit Hospital Organizations | ||||||
| Saint Francis Health | Tulsa | Jun 2013 | 186 | 145 | 41 | 28% |
| Integris Health | Oklahoma City | Jun 2013 | 99 | 54 | 45 | 83% |
| St John Health | Tulsa | Sep 2012 | 55 | 38 | 17 | 45% |
| Total all 3 | 340 | 237 | 103 | 43% | ||
Yeah, these 3 Oklahoma Non-Profit Hospital Organizations generated Total Bottom Line Profits of $340 mil in the most recent fiscal year, which was a $103 mil increase, or a robust 43% increase, over the previous fiscal year.
But there's substantially more to this earnings story.
When the Insurance Exchanges kick in starting in 2014, these Oklahoma Non-Profit Hospital Organizations should see their profits increase even 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. And if Oklahoma chose to Expand Medicaid, the profits of all Oklahoma Hospitals would be substantially increased by reducing the huge earnings charges related to both Bad Debts and Charity Care.
So what about the amounts of these two items.....Bad Debts and Uncompensated Charity Care? 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 above 3 Oklahoma Non-Profit Hospital Organizations which had Net Assets above $400 mil currently. In addition, I added the 2 Oklahoma Hospital Organizations which had either Net Assets or Annual Total Operating Revenues 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 | |||
| Oklahoma Non-Profit Hospital Organizations | ||||||
| Integris Health | Oklahoma City | Jun 2013 | 126 | 29 | 155 | 41 |
| St John Health | Tulsa | Sep 2012 | 63 | 57 | 120 | 35 |
| Saint Francis Health | Tulsa | Jun 2013 | 81 | 33 | 114 | 136 |
| Comanche County Hosp | Lawton | Jun 2012 | 38 | 6 | 44 | 10 |
| Duncan Regional Hosp | Duncan | Jun 2013 | 10 | 3 | 13 | 11 |
| Total all 5 | 318 | 128 | 446 | 233 | ||
| Provision for Bad Debts | 318 | |||||
| Uncompensated Charity Care Costs | 128 | |||||
| Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs | 679 | |||||
So, these 5 Oklahoma Hospital Organizations had Audited Total Hospital Operating Income of $233 mil in the most recent fiscal year. Driving down this $233 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $318 mil and Total Costs of Uncompensated Charity Care of another $128 mil. Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $679 mil, which is $446 mil higher than the reported $233 mil.
Granted these two earnings charges will not be totally eliminated with the ACA, but a very significant amount of these two earnings charges will be eliminated, and especially so if Oklahoma decided to Expand Medicaid, 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.
With these exceptional, ongoing Oklahoma Non-Profit 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.
