Michigan Non-Profit Hospitals Net Assets Up 75% Under Obama and the Affordable Care Act

From a review of the Electronic Municipal Market Access (EMMA), I found 11 Non-Profit Hospital Organizations headquartered in the State of Michigan with Net Assets (i.e. Financial Strength or Total Assets minus Total Liabilities) at the most recent date of more than $400 mil each and which also had 2013 Net Asset amounts available.  Below here are the Net Assets of these 11 at both the most recent reported date and also at the Fiscal Year End (FYE) closest to the beginning of the Obama Administration:

						FYE	Balance	Net
				Most		Balance	Sheet	Assets
			Most	Recent		Sheet	Net	%
			Recent	Balance		Date	Assets	Change
			Balance	Sheet		Beginning	Beginning	During
	City	State	Sheet	Net		Obama	Obama	Obama
Hospital Organization	HQs	HQs	Date	Assets		Admin	Admin	Admin
				mil $s			mil $s
CHE Trinity Health	Livonia	MI	Dec 13	10,206		Mar 09	6,008	70%
Spectrum Health System	Grand Rapids	MI	Mar 14	2,204		Jun 09	1,128	95%
Henry Ford Health System	Detroit	MI	Dec 13	1,572		Dec 08	1,053	49%
Beaumont Health System	Royal Oak	MI	Dec 13	1,288		Dec 08	787	64%
McLaren Health Care	Flint	MI	Dec 13	1,282		Sep 09	682	88%
Sparrow Health System	Lansing	MI	Dec 13	777		Dec 08	318	144%
MidMichigan Health	Midland	MI	Mar 14	672		Jun 09	414	62%
Oakwood Healthcare	Dearborn	MI	Dec 13	530		Dec 08	234	126%
Lakeland Hospitals	St Joseph	MI	Dec 13	526		Sep 09	353	49%
Bronson Healthcare Group	Kalamazoo	MI	Dec 13	580		Dec 08	226	157%
Munson Healthcare	Traverse City	MI	Dec 13	486		Jun 09	264	84%
Total all 11				20,123			11,467	75%

As you can see from the above chart, the Total Net Assets (Financial Strength) of these 11 Michigan Non-Profit Hospital Organizations increased by a very impressive 75% to $20.123 bil for their average 4.75 years so far during the Obama Administration.

The lowest percentage growth of the 11 was a robust 49%.

In just the past 6 months, the Total Net Assets increase during the Obama Administration grew substantially from 55% to 75%.

Very positively impacting this very robust increase in the Net Assets (Financial Strength) of these 11 Michigan Hospital Organizations were actions taken by both the Obama Administration and the US Fed to strengthen the US Financial Foundation which was severely damaged from the financial meltdown in late 2008.

In addition, the Affordable Care Act (ACA) has also played a key role in this very impressive increase in Net Assets (Financial Strength) of these 11 Michigan Non-Profit Hospital Organizations.

A remarkable thing is that these very robust increases in Net Assets (Financial Strength) of these Non-Profit Hospital Organizations occurred when these Non-Profit Hospitals were also playing very instrumental roles in the substantial annual percentage growth reduction of Total US Health Care Costs which occurred in each of the most recent three years under the ACA.

With such impressive Net Asset percentage increases of these 11 Michigan Hospitals, a key beneficiary of this will be Michigan citizens electing to buy health insurance on the Health Insurance Exchange.  This strong Net Asset growth gives these Michigan Hospitals the financial flexibility to moderate their pricing for hospital procedures in their negotiations with health insurance companies which ultimately determines what insurance premium prices are set at by health insurance companies on the Health Insurance Exchange.

University of Michigan

None of the above amounts have anything to do with the University of Michigan's Hospitals and Clinics since Michigan quit disclosing the amount of its Total Net Assets (Financial Strength or Excess of Total Assets over Total Liabilities) related to its renown Hospital and Clinics, which are very salient to the Affordable Care Act (ACA).

Thanks primarily to the exceptional stock market during the Obama Administration, the University of Michigan as a whole has seen its Total Net Assets grow by 33% during its most recent 4 Fiscal Years (FYs) ending June 30, 2013, going from $8.665 bil at June 30, 2009 to $11.483 bil at June 30, 2013.  These 4 FYs are completely during the Obama Administration.

Below here are the Total Operating Revenues and Total Operating Expenses of the University of Michigan's Hospitals and Clinics Operations for each of the most recent 4 FYs:

University of Michigan Hospitals and Clinics
					Total
					Four
	FY 2013	FY 2012	FY 2011	FY 2010	FYs
	mil $s	mil $s	mil $s	mil $s	mil $s
Patient Care Revenues	2,786	2,602	2,411	2,311	10,110
Patient Care Expenses	2,753	2,532	2,285	2,183	9,753
=Hospital Operating Income	33	70	126	128	357
Hosp Oper Income as % of Hosp Oper Revenues	1.2%	2.7%	5.2%	5.5%	3.5%

These above Hospital Profit Margin Percentages are very reasonable as it relates to the goal of controlling Total US Heath Care Costs.  Michigan's 3.5% Total Profit Margin for the most recent 4 FYs is substantially below the University of Texas Health Institutions exceedingly too high 10.8% and Vanderbilt University's Health Care Operations too high 8.1%.

With the University of Michigan Hospitals and Clinics' very low Profit Margin Percentages, a key beneficiary of this will be Michigan citizens electing to buy health insurance on the Health Insurance Exchange. 

Michigan Struggling Hospitals

But it's not just the University of Michigan Hospitals and Clinics which has posted weak operating results.

From a review of financial statements in EMMA, I found 27 Michigan Hospital Organizations there.  These 27 Michigan Hospital Organizations generated Total Operating Income of $713.6 mil in their most recent year, which was a very modest 2.3% of their Total Operating Revenues of $30.569 bil.

Of the 27 Michigan Hospital Organizations, 8 of them posted Operating Losses and 19 of them generated Operating Income Margins of less than 2.7%.

Below here are these 27 Michigan Hospital Organizations:

					Most
					Recent
				Operating	Annual
		Operating	Total	Income	Fiscal
	City	Income	Operating	(Loss)	Year
	HQs	(Loss)	Revenues	Margin	End
		mils $s	mils $s	%
Michigan Non-Profit Hospital Organizations
John Tolfree Health System	West Branch	(3.1)	35.8	-8.7%	Mar 2013
Crittenton Hospital Medical Ctr	Rochester Hills	(16.1)	229.0	-7.0%	Dec 2012
Calhoun County Medical Care	Battle Creek	(0.8)	13.3	-6.0%	Dec 2012
Allegiance Health	Jackson	(13.2)	420.4	-3.1%	Jun 2013
NorthStar Health System	Iron River	(1.1)	37.5	-2.9%	Dec 2012
Mercy Memorial Hospital	Monroe	(4.8)	165.0	-2.9%	Jun 2013
Metro Health	Wyoming	(5.5)	313.5	-1.8%	Jun 2013
Ascension Health Flint	Flint	(2.0)	459.0	-0.4%	Jun 2013
Hillsdale Community Health Ctr	Hillsdale	-	57.1	0.0%	Jun 2013
Beaumont Hospital	Royal Oak	6.7	2,274.9	0.3%	Dec 2013
Henry Ford Health	Detroit	13.7	4,559.8	0.3%	Dec 2013
Hurley Medical Center	Flint	2.5	369.1	0.7%	Jun 2013
Ascension Health Kalamazoo	Kalamazoo	4.2	558.9	0.8%	Jun 2013
MidMichigan Health	Midland	5.4	570.6	0.9%	Jun 2013
Dickinson County Healthcare	Iron Mountain	0.9	84.3	1.1%	Dec 2012
Sparrow Health	Lansing	12.8	1,144.4	1.1%	Dec 2013
Oakwood Healthcare	Dearborn	23.8	1,160.5	2.1%	Dec 2013
Covenant HealthCare System	Saginaw	13.1	509.0	2.6%	Jun 2013
McLaren Health	Flint	65.5	2,486.6	2.6%	Sep 2013
Total all 19		102.0	15,448.7	0.7%
Bronson Healthcare	Kalamazoo	26.5	901.5	2.9%	Dec 2012
Trinity Health	Livonia	304.8	8,978.4	3.4%	Jun 2013
Holland Hospital	Holland	7.9	206.9	3.8%	Mar 2013
Munson Healthcare	Traverse City	21.9	563.6	3.9%	Jun 2013
Spectrum Health	Grand Rapids	212.3	3,937.4	5.4%	Jun 2013
Alpena Regional Medical Ctr	Alpena	7.1	127.3	5.6%	Jun 2013
Otsego Memorial Hospital	Gaylord	5.8	78.4	7.4%	Dec 2012
Lakeland Hospitals	St Joseph	25.3	327.2	7.7%	Sep 2013
Total all 27		713.6	30,569.4	2.3%

When you have 71% of your State Hospitals each generating Operating Income below 2.7% of their Total Operating Revenues, you have a financial problem with your State's Hospitals that you have to quickly address.

By far the best and only economically good way to put a major dent in the Operating Losses of the Michigan struggling Hospitals is for the State of Michigan to fully expand Medicaid, which they wisely have done.  Since Michigan did this, there will be a resultant massive inflow of Patient Revenues from Medicaid expansion.

With this massive inflow of Revenues due to Medicaid expansion in Michigan, the struggling Michigan Hospitals will be able to substantially reduce their huge Operating Losses and a huge majority of them should even be able to turn their substantial losses into profits.  And due to Medicaid expansion, the Michigan Hospitals with very modest Operating Income will have their profits bolstered very robustly, as will the Michigan Hospitals now making higher than modest Operating Income.

Also since Michigan fully expanded Medicaid, another key beneficiary of the resultant very healthy profit improvement and thus also Total Net Assets improvement of all Michigan Hospitals will be the Michigan citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth from Medicaid expansion should in all fairness give all Michigan Hospitals the financial flexibility to moderate their pricing for hospital and other health care procedures in their negotiations with health insurance companies which ultimately determines what insurance premium prices are set at by health insurance companies on the Health Insurance Exchange.