One reason US Hospital bills are so high is that many of the larger Non-Profit Hospitals Systems set their pricing for hospital procedures so that they make a lot of money and retain it tax free, further increasing their already massive treasure chest of Investments in Equity and Debt Securities, which also grow tax free.
Thus, US Hospitals are playing a key role in determining ultimately whether health insurance premiums are fairly priced on the health insurance exchanges.
Well, New York is one State whose large Non-Profit Hospital Organizations are not being greedy in generating high operating profits.
From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found 15 New York State Non-Profit Hospital Organizations with either Net Assets above $400 mil or with Total Operating Revenues above $1 bil in the most recent year. These 15 New York Hospital Organizations generated Total Operating Income of $404 mil in the most recent year, which was an extremely modest 1.1% of Total Operating Revenues of $35.889 bil.
With New York Hospitals generating such modest profits, a key beneficiary will be New York citizens buying health insurance on the insurance exchange. New York 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 on the insurance exchange.
Another factor which will help keep insurance premium prices reasonable in the New York health insurance exchange is that New York has wisely elected to expand Medicaid. This will increase New York Hospital profits substantially and thus permit New York 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 on the New York State Insurance Exchange.
So just how much will New York Hospital Profits increase due to the ACA and the Expansion of Medicaid?
Well, these 15 New York Hospital Organization's audited financial statements show it will be huge.
For these 15 New York Hospital Organizations, Total Operating Income was $404 mil in the most recent year. Driving down these Operating Profits were Provisions for Bad Debts of $773 mil and Uncompensated Charity Care Costs Incurred of another $945 mil. Thus Total Operating Income exclusive of these two Earnings Charges was $2.122 bil, which was more than 5 times the reported Total Operating Income of $404 mil.
Granted not all of these two huge Earnings Charges will be eliminated with ACA and Medicaid Expansion, but a substantial portion of them will.
Below here are Audited Operating Income, Total Operating Revenues and Operating Income Profit Margin Percentage in the most recent year for each of these 15 large New York Non-Profit Hospital Organizations:
| Operating | |||
| Operating | Total | Income | |
| Income | Operating | (Loss) | |
| (Loss) | Revenues | Margin | |
| mils $s | mils $s | % | |
| New York Hospital Organizations | |||
| New York City Health & Hospitals | (668) | 5,845 | -11.4% |
| St. Luke's Roosevelt Hospital | 10 | 1,199 | 0.8% |
| Kaleida Health Buffalo | 16 | 1,222 | 1.3% |
| North Shore Long Island Jewish Health | 98 | 6,702 | 1.5% |
| Albany Medical Center | 14 | 935 | 1.5% |
| Winthrop University Hospital Association | 18 | 1,033 | 1.7% |
| Catholic Health Services Long Island | 53 | 2,056 | 2.6% |
| St Peter's Health Partners | 31 | 1,070 | 2.9% |
| Montefiore Medical Center | 100 | 3,084 | 3.2% |
| Sloan-Kettering Cancer Center | 91 | 2,789 | 3.3% |
| Hospital For Special Surgery | 33 | 766 | 4.3% |
| Mount Sinai Hospital | 79 | 1,773 | 4.5% |
| New York and Presbyterian Hospital | 195 | 3,848 | 5.1% |
| Icahn School of Medicine | 85 | 1,578 | 5.4% |
| NYU Hospitals Center | 249 | 1,989 | 12.5% |
| Total all 15 | 404 | 35,889 | 1.1% |
