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 ultimately determining whether health insurance premiums are fairly priced on the health insurance exchanges.
But Ohio is one State whose large Non-Profit Hospital Organizations are not, for the most part, being greedy in generating high operating profits.
From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), I found 14 Ohio Non-Profit Hospital Organizations with Net Assets above $400 mil. When I exclude the 3 Ohio Children's Hospitals, that leaves 11. These 11 Ohio Non-Profit Hospital Organizations generated Total Operating Income of $880 mil in the most recent fiscal year, which was a modest 3.6% of Total Operating Revenues of $24.112 bil.
With Ohio Hospitals generating such modest profits, a key beneficiary will be Ohio citizens buying health insurance on the Federal insurance exchange. Ohio 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 Federal insurance exchange.
Another factor which will help keep insurance premium prices reasonable in the health insurance exchange for Ohio residents is that Ohio has elected to expand Medicaid. This will increase Ohio Hospital profits substantially and thus permit Ohio 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 Ohio citizens on the Federal Insurance Exchange.
So just how much will Ohio Hospital Profits increase due to the ACA and the Expansion of Medicaid?
Well, these 11 Ohio Hospital Organization's audited financial statements show it will be huge.
For these 11 Ohio Hospital Organizations, Total Operating Income was $880 mil in the most recent year. Driving down these Operating Profits were Provisions for Bad Debts of $1.217 bil and Uncompensated Charity Care Costs Incurred of another $809 mil. Thus Total Operating Income exclusive of these two Earnings Charges was $2.906 bil, which was more than 3 times the reported Total Operating Income of $880 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 11 large Ohio Non-Profit Hospital Organizations:
| Operating | ||||
| Operating | Total | Income | ||
| City | Income | Operating | (Loss) | |
| HQs | (Loss) | Revenues | Margin | |
| mils $s | mils $s | % | ||
| Ohio Non-Profit Hospital Organizations | ||||
| UC Health | Cincinnati | (8) | 1,206 | -0.7% |
| Kettering Health Network | Dayton | 13 | 1,228 | 1.1% |
| Summa Health System | Akron | 18 | 1,359 | 1.3% |
| Christ Hospital Health Network | Cincinnati | 19 | 762 | 2.5% |
| Premier Health Partners | Dayton | 47 | 1,846 | 2.5% |
| University Hospitals Health System | Cleveland | 65 | 2,266 | 2.9% |
| Catholic Health Partners | Cincinnati | 129 | 3,819 | 3.4% |
| Cleveland Clinic Health System | Cleveland | 228 | 6,215 | 3.7% |
| Mount Carmel Health System | Columbus | 72 | 1,464 | 4.9% |
| ProMedica Health Care | Toledo | 82 | 1,418 | 5.8% |
| OhioHealth | Columbus | 215 | 2,529 | 8.5% |
| Total all 11 | 880 | 24,112 | 3.6% |
