These Virginia Non-Profit Hospital Organizations generated Total Bottom Line Profits of $1.665 bil in the most recent audited fiscal year, which was an incredibly high 9.9% of Total Operating Revenues of $16.736 bil.
So, all Non-Profit Hospitals in Virginia combined....both the large and the small.....and both ones well run and ones not so well run....registered a 9.9% Total Bottom Line Profit Margin which was higher than the 9.6% Total Bottom Line Profit Margin posted by all of the prestigious 30 Dow Industrial companies combined in the most recent fiscal year. Go figure!
To understand what is going on with Virginia Non-Profit Hospital Organization Earnings, it is helpful to break them down by how financially strong the Hospitals are.....or by their Net Assets (i.e. The Excess of Total Assets Over Total Liabilities).
When this breakdown is done, there is a crystal-clear conclusion.....the better the financial strength of the Hospital Organization, the substantially better the earnings.
Bottom Line Earnings is a combination of Operating Income and Non-Operating Income, with the latter being due predominantly to Investment Returns.
On a Bottom Line Profits basis, here is a summary of the most recent audited annual earnings results of these Hospital Organizations by Net Asset size:
Net Assets > $1 Bil...............Total Bottom Line Income as % of Total Revenues..12.3%
Net Assets $400 Mil-$1 Bil..Total Bottom Line Income as % of Total Revenues....8.1%
Net Assets $100-400 Mil.....Total Bottom Line Income as % of Total Revenues....4.1%
Net Assets < $100 Mil..........Total Bottom Line Income as % of Total Revenues....3.5%
When the 4 largest Virginia Hospital Organizations with Net Assets of more than $1 bil generate a Total Bottom Line Profit Margin of 12.3% and the 4 smallest with Net Assets below $100 mil generate a Total Bottom Line Profit Margin of a substantially lower 3.5%, there is a huge Hospital Income Inequality problem.
And to expand the number of hospitals here, when the 12 largest Virginia Hospital Organizations with Net Assets of more than $400 mil generate a Total Bottom Line Profit Margin of 10.9% and the 10 smallest with Net Assets below $400 mil generate a Total Bottom Line Profit Margin of a substantially lower 4.0%, yes there is indeed a massive Hospital Income Inequality problem.
One of the main drivers of the much lower Total Bottom Line Profits of $92 mil for these 10 smaller Virginia Hospital Organizations in the most recent audited fiscal year were Total Bad Debt Earnings Charges of $175 mil.
Another item putting pressure on the earnings of these smaller 10 Hospitals were very high Uncompensated Charity Care Earnings Charges.
The best way to provide a needed financial boost for these smaller Virginia Hospitals is to simply Expand Medicaid in Virginia. This will substantially reduce two Hospital Operating Statement Earnings Charges.....Provisions for Bad Debts and Uncompensated Charity Care Costs.
OK, that fixes the profits of the Virginia Hospitals at the low end. But Medicaid Expansion will also enhance the profits even further of the Virginia Hospitals at the top end. So how do you fix that?
Well, you simply enact wise, creative, effective legislation to remove the excess past and future profits of Non-Profit Hospitals at the top end, not just in Virginia, but also the many other ones earning excessive profits in other US States.
And the beauty about the latter strategy is that it also provides a substantial amount of funding to finance at least several years of Elimination of US Government Sequester Budget Cuts, to stimulate the US economy through wise initiatives like US infrastructure investments and to finance the huge and thorny doc-fix problem.
From a review of audited financial statements in the Electronic Municipal Market Access (EMMA), below here are the Bottom Line Profits and Operating Revenues of the 22 Non-Profit Hospital Organizations headquartered in the State of Virginia with Total Operating Revenues of more than $10 mil each in the most recent fiscal year, stratified by Net Asset size:
| Most | |||||
| Recent | Bottom | Bottom | |||
| Annual | Line | Line | |||
| Fiscal | Net | Total | Profit | ||
| City | Year | Income | Operating | Margin | |
| HQs | End | (Loss) | Revenues | % | |
| mils $s | mils $s | ||||
| Virginia Non-Profit Hospital Organizations | |||||
| Net Assets > $1 bil | |||||
| Inova Health | Falls Church | Dec 2012 | 363 | 2,362 | 15.4% |
| Sentara HealthCare | Norfolk | Dec 2012 | 431 | 4,068 | 10.6% |
| VCU Health | Richmond | Jun 2013 | 192 | 1,189 | 16.1% |
| University Virginia Medical Center | Charlottesville | Jun 2012 | 94 | 1,190 | 7.9% |
| Total 4 With Net Assets > $1 bil | 1,080 | 8,809 | 12.3% | ||
| Net Assets $400 mil-$1 bil | |||||
| Mountain States Health Alliance | Virginia/Tennessee | Jun 2013 | 60 | 1,059 | 5.6% |
| Virginia Hosp Center Arlington | Arlington | Dec 2012 | 83 | 388 | 21.4% |
| Valley Health System | Winchester | Dec 2012 | 44 | 742 | 5.9% |
| St. Mary's Hospital* | Richmond | Aug 2013 | 65 | 508 | 12.8% |
| Wellmont Health System | Virginia/Tennessee | Jun 2013 | 35 | 798 | 4.4% |
| Carilion Clinic | Roanoke | Sep 2012 | 107 | 1,193 | 9.0% |
| Centra Health | Lynchburg | Dec 2012 | 48 | 667 | 7.2% |
| Augusta Health Care | Staunton/Waynesboro | Dec 2012 | 52 | 264 | 19.7% |
| Total 8: Net Assets $400 mil-$1 bil | 493 | 5,619 | 8.8% | ||
| Net Assets $100-$400 mil | |||||
| Prince William Hospital | Manassas | Dec 2012 | 42.3 | 212 | 20.0% |
| Mary Washington Healthcare | Fredericksburg | Dec 2012 | (12.1) | 573 | -2.1% |
| Memorial Regional Medical Ctr* | Mechanicsville | Aug 2013 | 10.2 | 336 | 3.0% |
| Mary Immaculate Hospital* | Newport News | Aug 2013 | 20.6 | 174 | 11.8% |
| Fauquier Health | Warrenton | Sep 2012 | 6.4 | 144 | 4.4% |
| Maryview Medical Center* | Portsmouth | Aug 2013 | 4.7 | 301 | 1.6% |
| Total 6: Net Assets $100-$400 mil | 72.1 | 1,740 | 4.1% | ||
| Net Assets < 100 mil | |||||
| Halifax Regional Hospital | South Boston | Aug 2012 | (1.9) | 91 | -2.1% |
| St. Francis Medical Center* | Midlothian | Aug 2013 | 18.4 | 244 | 7.5% |
| Richmond Community Hospital* | Richmond | Aug 2013 | 10.7 | 67 | 16.0% |
| Depaul Medical Center* | Norfolk | Aug 2013 | (7.6) | 166 | -4.6% |
| Total 4: Net Assets < $100 mil | 19.6 | 568 | 3.5% | ||
| Total all 22 | 1,665 | 16,736.0 | 9.9% | ||
* These Hospitals are part of the Bon Secours Health System.
