Washington State Non-Profit Hospital Earnings Up 115% in the Most Recent Year Under Obamacare and Headed Substantially Higher

From a review of the Electronic Municipal Market Access (EMMA), I found 4 Non-Profit Hospital Organizations headquartered in the State of Washington with Net Assets at the most recent date reported of more than $400 mil each.  Below here are the Bottom Line Profits in the most recent two audited fiscal years reported for each of these 4 Washington 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
Washington Non-Profit Hospital Organizations
Providence Health	Renton	Dec 2012	412	362	50	14%
MultiCare Health	Tacoma	Dec 2012	241	59	182	308%
Seattle Children's Healthcare	Seattle	Sep 2012	202	64	138	216%
PeaceHealth	Vancouver	Jun 2013	96	(43)	139	323%
Total all 4			951	442	509	115%

Note:  Providence Health's above Bottom Line Profits of $412 mil in the most recent year excludes $805 mil of Economic Gains from new Hospital Affiliations.

As you can see in the above chart, these 4 Washington State Non-Profit Hospital Organizations generated Total Bottom Line Profits of $951 mil in the most recent fiscal year, up an exceptional 115% from the previous year.

But there's much more to this earnings story.

When the Insurance Exchanges kick in starting in 2014, these Washington State Non-Profit Hospital Organizations should see their profits increase by substantially 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 since Washington is wisely Expanding Medicaid, the profits of all Washington Hospitals will 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, particularly in Washington which has a substantial overweighting of Catholic Hospitals.

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 3 Washington Non-Profit Hospital Organizations which had Net Assets above $400 mil currently.  I excluded Seattle Children's Healthcare.  And I included a 15% Washington allocation of Catholic Health Initiatives amounts, since Washington-based Franciscan Health System comprised 15% of Catholic Health Initiative's Consolidated Total Operating Revenues:

				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
Washington Hospital Organizations
Providence Health	Renton	Dec 2012	390	272	662	204
PeaceHealth	Vancouver	Jun 2013	161	68	229	10
Wash 15% of Catholic Health Initiatives		Jun 2013	123	48	171	(8)
MultiCare Health	Tacoma	Dec 2012	132	35	167	159
Total all 4			806	423	1,229	365
Provision for Bad Debts						806
Estimated Costs of Uncompensated Charity Care						423
Operating Income Excluding Bad Debts and Uncompensated Charity Care Costs						1,594

So, these 4 Hospital Organizations had Audited Total Hospital Operating Income of $365 mil in the most recent fiscal year.  Driving down this $365 mil Total Hospital Operating Income were Total Provisions for Bad Debts of $806 mil and Total Costs of Uncompensated Charity Care of another $423 mil.  Thus, exclusive of these two earnings charges, Total Hospital Operating Income would have been $1.594 bil, which is $1.229 bil higher than the reported $365 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 is 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 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. 

And lastly, it is just incredible how much the financial strength of these Washington State Non-Profit Hospitals has been enhanced during the Obama Administration.

From EMMA, below here are the Net Assets of these 4 Washington State Non-Profit Hospital Organizations at June 30, 2013 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	%
Hospital Organization	HQs	HQs	Date	Assets		Date	Assets	Change
				mil $s			mil $s
Providence Health	Renton	WA	Jun 13	6,757		Dec 08	3,911	73%
Seattle Children's Healthcare	Seattle	WA	Jun 13	1,759		Sep 09	1,195	47%
PeaceHealth	Vancouver	WA	Jun 13	1,617		Jun 09	897	80%
MultiCare Health System	Tacoma	WA	Jun 13	1,475		Dec 08	650	127%
Total all 4				11,608			6,653	74%

Yeah, these 4 Washington State Non-Profit Hospital Organizations had their Total Net Assets increase by a massive $4.955 bil to $11.608 bil, an increase of a very robust 74% during the Obama Administration so far.  This $4.955 bil Net Asset increase comes predominantly from the tax-free cumulative earnings of these Washington State Hospitals during the Obama Administration.