New Jersey Non-Profit Hospitals Net Assets Up 162% Under Obama and the Affordable Care Act

From a review of the Electronic Municipal Market Access (EMMA), I found 8 Non-Profit Hospital Organizations headquartered in the State of New Jersey with Net Assets (i.e. Financial Strength or Total Assets minus Total Liabilities) at the most recent date of more than $400 mil each.  Below here are the Net Assets of these 8 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
Virtua Health	Marlton	NJ	Dec 13	1,091		Dec 08	566	93%
AHS (Atlantic Health System) Hospital	Morristown	NJ	Dec 13	1,046		Dec 08	510	105%
Robert Wood Johnson University Hospital	New Brunswick	NJ	Mar 14	853		Dec 08	457	87%
Meridian Hospitals	Red Bank	NJ	Dec 13	903		Dec 08	339	166%
Hackensack University Medical Center	Hackensack	NJ	Dec 13	703		Dec 08	297	137%
Barnabus Health	West Orange	NJ	Dec 13	651		Dec 08	(290)	324%
AtlantiCare Regional Medical Center	Galloway	NJ	Dec 13	491		Dec 08	262	87%
Cooper Health Obligated Group	Camden	NJ	Dec 13	432		Dec 08	218	98%
Total all 8				6,170			2,359	162%

As you can see from the above chart, the Total Net Assets (Financial Strength) of these 8 New Jersey Non-Profit Hospital Organizations increased by a phenomenal 162% to $6.170 bil during their average 5.03 years so far of the Obama Administration.

To illustrate how broad-based this New Jersey Hospital Net Asset Growth was, the lowest percentage increase of the 8 was an exceptionally high 87%.

Very positively impacting this massive increase in the Net Assets (Financial Strength) of these 8 New Jersey Hospitals 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 huge increase in Net Assets (Financial Strength) of these 8 New Jersey 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 spectacular Net Asset percentage increases of these 8 New Jersey Hospitals, a key beneficiary of this will be New Jersey citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth gives these New Jersey 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 Medicine and Dentistry of New Jersey

There are many Hospitals in New Jersey which are struggling financially, but none more so than the Newark-based  University of Medicine and Dentistry of New Jersey, a Component Unit of the New Jersey State Government and thus a Public Non-Profit Governmental Unit.

Below here are the relevant portions of its Operating Statements for the 4 Fiscal Years (FYs) ended June 30, 2012, which are the most recent financial statements disclosed on EMMA.

University of Medicine and Dentistry of New Jersey					Total
					Four
	FY 2012	FY 2011	FY 2010	FY 2009	FYs
	mil $s	mil $s	mil $s	mil $s	mil $s
Operating Revenues	1,403	1,384	1,372	1,325	5,484
Operating Expenses	1,782	1,758	1,803	1,771	7,114
Operating Loss Before Interest Expense	(379)	(374)	(431)	(446)	(1,630)
Interest Expense	39	39	40	39	157
Operating Loss After Interest Expense	(418)	(413)	(471)	(485)	(1,787)
State Appropriations-Operations	206	215	262	254	937
State Appropriations-Payments of Fringe Benefits	205	154	193	182	734
Total State Appropriations	411	369	455	436	1,671

As you can see from the above chart, the University of Medicine and Dentistry of New Jersey generated Total Operating Losses After Interest Expense of a massive $1.787 bil for the 4 years ended June 30, 2012.

Of that $1.787 bil Total Operating Losses, $1.671 bil, or 94% of it, was funded by State Appropriations or in other words by New Jersey Taxpayers.

The University of Medicine and Dentistry of New Jersey recorded Total Bad Debts Charges of $266 mil and also incurred Estimated Charity Care Costs of another $233 mil, both for the 2 Years ended June 30, 2012, and at the same time, it was recording Total Operating Losses After Interest Expense of $831 mil.  So, these Bad Debt Charges and Charity Care Costs made up a substantial portion of the Operating Losses in those 2 years.

By far the best and only way to put a major dent in the University of Medicine and Dentistry of New Jersey's massive Operating Losses and also those of other struggling New Jersey Hospitals is for the State of New Jersey to fully expand Medicaid, which it wisely has.  There will be a resultant massive inflow of Patient Revenues from Medicaid expansion, and thus the University of Medicine and Dentistry of New Jersey and other struggling New Jersey Hospitals will be able to substantially reduce their huge Operating Losses.

In addition, one of the key beneficiaries of the resultant very healthy profit improvement and thus also Total Net Assets improvement of all New Jersey Hospitals due to Medicaid expansion in New Jersey will be New Jersey citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth from Medicaid expansion will give all New Jersey 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.