One reason US Hospital bills are so high is that many of the larger Hospitals Systems set their pricing for hospital procedures so that they make a lot of money.
Thus, US Hospitals are playing a key role in ultimately determining whether health insurance premiums are fairly priced on the health insurance exchanges.
Some Texas Hospital Organizations are being greedy in generating very high operating profits. But most of them are not.
From a review of audited financial statements and related footnotes in the Electronic Municipal Market Access (EMMA), I found 44 Texas Non-Profit Hospital Organizations, including Government Hospital Organizations, headquartered in the State of Texas with Total Operating Revenues of more than $10 mil each in the most recent fiscal year. This 44 number excludes the 3 very profitable Children's Hospitals in Texas.
These 44 Texas Non-Profit Hospital Organizations posted not a Total Operating Income but rather a Total Operating Loss of $354 mil in the most recent audited fiscal year, which was (1.1)% of Total Operating Revenues of $32.210 bil.
It is helpful to break down these Texas Hospital operating results by Non-Profit Hospital type.
The 23 Texas Non-Profit Hospital Organizations which weren't Governmental County District Hospitals generated Audited Total Operating Income of $1.250 bil in the most recent year, which was a very reasonable 4.5% of Total Operating Revenues. 16 of these 23 Hospitals posted Operating Income Margins of less than 5.0%, with a related Total Operating Margin of only 2.2%.
On the other hand, the 21 Texas Governmental County District Hospitals posted a Total Loss of $1.604 bil, which was an off-the-charts (36.7)% of Total Operating Revenues of $4.375 bil.
The huge Operating Losses of these Texas Governmental County District Hospitals were mostly generated in 4 large Urban Areas (Houston, Dallas, San Antonio and Fort Worth), were due to the high percentage of uninsured and underinsured using emergency hospital facilities there, and were funded predominantly by Property Tax Revenues.
With so many of these Texas Hospital Organizations generating either Operating Losses or Operating Income Margins below 5.0%, a key beneficiary of this will be Texas citizens buying health insurance on the Federal insurance exchange. These Texas Hospitals, for the most part, will not be baking in excessive Hospital profits demands in their negotiations with health insurance companies on pricing for hospital procedures which ultimately determines what insurance premiums are set by health insurance companies for Texas residents on the Federal insurance exchange.
So far, Texas has decided to not expand Medicaid. If Texas changed its mind and decided to fully Expand Medicaid, then the consequences of this action would be to further drive down insurance premium prices for Texas residents in the Federal health insurance exchange. This Texas Medicaid Expansion would increase Texas Hospital profits dramatically and thus permit Texas Hospitals to be even more reasonable in their negotiations with health insurance companies on pricing for hospital procedures which ultimately drives what health insurance premiums are set at by health insurers for Texas residents on the Federal Health Insurance Exchange.
So just how much would Texas Hospital Profits increase due to the ACA and the Full Expansion of Medicaid?
Texas disclosed in its State website the relevant amounts for its 539 Acute Care Hospitals for the fiscal year 2011, and the amounts are truly mind-boggling.
These 539 Texas Acute Care Hospitals had Total Bad Debt Charges of $7.785 bil in 2011, which was a huge 13.7% of their Total Net Patient Revenues of $56.648 bil in 2011.
And these 539 Texas Acute Care Hospitals had Total Charity Care Charges of another $10.297 bil in 2011.
Granted not all of these two huge Earnings Charges will be eliminated with ACA and Medicaid Expansion, but a substantial portion of them will.
In addition, it could well be that Texas taxpayers would get substantial Property Tax Relief with full Medicaid Expansion since the huge Operating Losses of the Texas County District Hospitals would mostly go away and thus in all fairness the Property Taxes funding these Operating Losses should also be reduced very significantly with full Medicaid Expansion.
Below here are the Audited Operating Income or Loss, Total Operating Revenues and Operating Income (Loss) Margin Percentage in the most recent year for each of these 44 Texas Non-Profit Hospital Organizations:
| Operating | ||||
| Operating | Total | Income | ||
| Texas | Income | Operating | (Loss) | |
| City | (Loss) | Revenues | Margin | |
| mils $s | mils $s | % | ||
| Texas Non-Profit Hospital Organizations | ||||
| Texas Non-County District Hospitals | ||||
| Community Hospital Brazosport | Lake Jackson | (4) | 73 | -5.5% |
| Sid Peterson Memorial Hospital | Kerrville | (5) | 93 | -5.4% |
| Mission Hospital | Mission | (2) | 112 | -1.8% |
| Memorial Health System East Texas | Lufkin | (3) | 192 | -1.6% |
| Guadalupe Regional Medical Center | Seguin | (1) | 80 | -1.3% |
| St Joseph Health Texas Region | Lubbock | (15) | 1,208 | -1.2% |
| Baylor College of Medicine | Houston | (16) | 1,365 | -1.2% |
| St. Mark's Medical Center | LaGrange | - | 27 | 0.0% |
| Trinity Mother Frances Health | Tyler | 2 | 653 | 0.3% |
| East Texas Medical Center | Tyler | 12 | 942 | 1.3% |
| Good Shepherd Health | Longview | 6 | 402 | 1.5% |
| Christus Health | Irving | 73 | 3,701 | 2.0% |
| Hillcrest Baptist Medical Center | Waco | 7 | 223 | 3.1% |
| Scott & White Healthcare | Temple | 65 | 2,047 | 3.2% |
| Memorial Hermann HealthCare | Houston | 166 | 3,578 | 4.6% |
| St. Luke's Episcopal Health | Houston | 60 | 1,244 | 4.8% |
| The Methodist Hospital System | Houston | 144 | 2,331 | 6.2% |
| Hendrick Medical Center | Abilene | 21 | 323 | 6.5% |
| Baylor Health System | Dallas | 293 | 4,124 | 7.1% |
| Texas Health Resources | Arlington | 289 | 3,725 | 7.8% |
| United Regional Health Care | Wichita Falls | 26 | 279 | 9.3% |
| Decatur Hospital Authority | Decatur | 16 | 144 | 11.1% |
| Methodist Health System Dallas | Dallas | 116 | 969 | 12.0% |
| Total 23 Texas Non-County District Hospitals | 1,250 | 27,835 | 4.5% | |
| Texas County District Hospitals | ||||
| Harris | Houston | (560) | 593 | -94.4% |
| Tarrant | Fort Worth | (291) | 442 | -65.8% |
| Dallas (Parkland) | Dallas | (433) | 1,235 | -35.1% |
| Gainesville | Gainesville | (9) | 26 | -34.6% |
| Andrews | Andrews | (8) | 24 | -33.3% |
| Gaines | Seminole | (6) | 19 | -31.6% |
| Bexar | San Antonio | (195) | 773 | -25.2% |
| Metagorda | Bay City | (8) | 37 | -21.6% |
| Nacogdoches | Nacogdoches | (15) | 74 | -20.3% |
| Scurry | Snyder | (4) | 20 | -20.0% |
| Ector | Odessa | (41) | 211 | -19.4% |
| Hopkins | Sulphur Springs | (8) | 53 | -15.1% |
| Mitchell | Colorado City | (2) | 15 | -13.3% |
| Dawson | Lamesa | (2) | 17 | -11.8% |
| Hunt Memorial | Greenville | (7) | 97 | -7.2% |
| Titus | Mt Pleasant | (4) | 62 | -6.5% |
| Deaf Smith | Hereford | (1) | 18 | -5.6% |
| El Paso | El Paso | (18) | 376 | -4.8% |
| Angleton-Danbury | Angleton | (1) | 30 | -3.3% |
| Midland | Midland | 8 | 231 | 3.5% |
| Wilson | Floresville | 1 | 22 | 4.5% |
| Total 21 Texas County District Hospitals | (1,604) | 4,375 | -36.7% | |
| Total 44 Texas Non-Profit Hospitals | (354) | 32,210 | -1.1% |
