Washington DC Non-Profit Hospital Earnings Up 321% Under Obamacare and Headed Substantially Higher

From a review of the Electronic Municipal Market Access (EMMA), I found 3 Non-Profit Hospital Organizations operating in Washington DC with Net Assets at the most recent date reported of more than $400 mil each.  MedStar Health is Maryland headquartered with 45% of its staffed beds located in Washington DC, including the Washington Hospital Center and the Georgetown University Hospital.  Sibley Memorial Hospital is located in Northwest Washington DC and is now part of the Maryland headquartered Johns Hopkins Health System.  Below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of these 3 Washington DC Non-Profit Hospital Organizations:

			Most
		Most	Recent	Prior
		Recent	Year	Year
		Annual	Bottom	Bottom
		Fiscal	Line	Line	Increase	Increase
		Year	Net	Net	(Decrease)	(Decrease)
		End	Income	Income	Amount	%
			mils $s	mils $s	mils $s
Washington DC Non-Profit Hospital Organizations
MedStar Health		Jun 2013	186	70	116	166%
Sibley Memorial Hospital		Jun 2013	68	20	48	240%
Children's National Medical Ctr		Jun 2013	24	(24)	48	200%
Total all 3			278	66	212	321%

Yeah, these 3 Washington DC Non-Profit Hospital Organizations generated Total Bottom Line Profits of $278 mil in the most recent fiscal year, which was a $212 mil increase, or an off-the-charts 321% increase, over the previous fiscal year.  

But there's much more to this earnings story.

When the Insurance Exchanges kick in starting in 2014, these Washington DC Non-Profit Hospital Organizations should see their profits increase enormously.

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 since Washington DC is wisely Expanding Medicaid, the profits of these Washington DC Hospitals will be substantially increased by reducing the 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 Washington Non-Profit Hospital Organizations:

				One Year	One
			One Year	Estimated	Year	One
		Most	Provision	Cost of	Total	Year
		Recent	For	Uncompensated	Earnings	Hospital
		Annual	Bad	Charity	Charge	Operating
		FYE	Debts	Care	of Both	Income
			mils $s	mils $s	mils $s	mils $s
Washington DC Non-Profit Hospital Organizations
MedStar Health		Jun 2013	215	52	267	79
Children's National Medical Ctr		Jun 2013	27	15	42	12
Sibley Memorial Hospital		Jun 2012	8	3	11	25
Total all 3			250	70	320	116
Provision for Bad Debts						250
Uncompensated Charity Care Costs						70
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						436

So, these 3 Washington Non-Profit Hospital Organizations had Audited Total Hospital Operating Income of $116 mil in the most recent fiscal year.  Driving down this $116 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $250 mil and Total Costs of Uncompensated Charity Care of another $70 mil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $436 mil, which is $320 mil higher than the reported $116 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 since Washington DC is presciently electing 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 very strong, ongoing Washington DC 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.