Tuesday, March 18, 2014

South Carolina Non-Profit Hospitals Net Assets Up 43% Under Obama and the Affordable Care Act

From a review of the Electronic Municipal Market Access (EMMA), I found 7 Non-Profit Hospital Organizations headquartered in the State of South Carolina 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 7 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









Greenville Hospital System Greenville SC Dec 13     1,015
Sep 09          802 27%
McLeod Health Florence SC Dec 13        971
Sep 09          533 82%
Palmetto Health Columbia SC Dec 13        865
Sep 09          593 46%
Lexington County Health Services District West Columbia SC Sep 13        621
Sep 09          454 37%
Spartanburg Regional Healthcare System Spartanburg SC Dec 13        560
Sep 09          487 15%
Self Regional Healthcare Greenwood SC Sep 13        480
Sep 09          305 57%
Anmed Health Anderson SC Dec 13        465
Sep 09          300 55%









Total all 7


    4,977

      3,474 43%

As you can see from the above chart, the Total Net Assets (Financial Strength) of these 7 South Carolina Non-Profit Hospital Organizations increased by a robust 43% to $4.977 bil during their average 4.17 years of the Obama Administration.

In just the past 6 months, this Total Net Asset increase grew from 34% to 43%.

Very positively impacting this nice increase in the Net Assets (Financial Strength) of these 7 South Carolina 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 increase in Net Assets (Financial Strength) of these 7 South Carolina Non-Profit Hospital Organizations.

A remarkable thing is that these 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 robust Net Asset percentage increases of these 7 South Carolina Hospitals, a key beneficiary of this will be South Carolina citizens electing to buy health insurance on the Health Insurance Exchange.  This very solid Net Asset growth gives these South Carolina 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.

South Carolina......So Many Struggling Hospitals

South Carolina's Health website contains some key and cool interactive financial information for all of its 60 Hospitals.

Overall, the 60 South Carolina Hospitals had a respectable, Goldilocks Operating Income from Patient Services as a Percentage of Total Revenues of 3.9% for 2012, the most recent year presented.  But you have to stratify these Hospitals to find out what is really going on with South Carolina Hospitals.

First, let's look at the upper end South Carolina Urban Hospitals.

The Top 13..... what I'll call Urban Pure Gold Hospitals..... generated Total Patient Services Operating Income of 14.8% of Total Revenues.....that's about 50% higher than what the 30 Dow Industrials combined generated.  This is flat out crazy and tells you why US Health Care Costs have been so incredibly out of control.  And it only makes sense that leading this Pure Gold List at an incredibly greedy 26.8% is Hilton Head Hospital.  Here are the Top 13:




Patient


Patient
Services


Services
Profit


Profit Total (Loss)
South Carolina Hospital City (Loss) Revenues Margin


$000s $000s %
Urban Pure Gold Hospitals



Hilton Head Hospital Hilton Head Island           32,261         120,259 26.8%
Roper Bon Secours St Francis Hosp Charleston           37,187         189,608 19.6%
St Francis Hospital Greenville           97,103         503,972 19.3%
AnMed Health Medical Center Anderson         107,164         570,362 18.8%
Patewood Memorial Hospital Greenville           16,145           97,743 16.5%
Grand Strand Regional Med Ctr Myrtle Beach           42,190         262,215 16.1%
East Cooper Medical Center Mt Pleasant           17,102         129,057 13.3%
Aiken Regional Medical Centers Aiken           20,727         181,224 11.4%
Roper Hospital Charleston           41,736         375,619 11.1%
Trident Medical Center Charleston           38,632         352,630 11.0%
McLeod Regional Medical Center Florence           68,077         627,072 10.9%
Carolinas Pines Regional Med Ctr Hartsville             9,086           85,757 10.6%
Piedmont Medical Center Rock Hill           23,609         234,189 10.1%





Total all 13 Urban Pure Gold
        551,019      3,729,707 14.8%

But you get a completely different story when you look at the bottom half of these 60 South Carolina Hospitals.  I'll call them the In-The-Red Abandoned South Carolina Hospitals.

Of the 60 South Carolina Hospitals, an amazingly high 32 of them, or 53% of them, are In The Red.....each of them posting Operating Losses from Patient Services in 2012.  And 2 more just barely missed hitting the In-The-Red Abandoned Group.  Here are the 32 In-The-Red Abandoned South Carolina Hospitals:





Patient


Patient
Services


Services
Profit


Profit Total (Loss)
South Carolina Hospital City (Loss) Revenues Margin


$000s $000s %
In-The-Red Abandoned Hospitals



North Greenville Hospital Travelers Rest            (7,077)           18,157 -39.0%
Clarendon Memorial Hospital Manning          (14,977)           46,526 -32.2%
Marlboro Park Hospital Bennettsville            (8,424)           27,547 -30.6%
McLeod Loris Seacoast Loris          (22,131)           99,623 -22.2%
Novant Health Gaffney Med Ctr Gaffney            (8,177)           43,161 -18.9%
Carolinas Hosp System-Marion Mullins          (10,159)           56,038 -18.1%
Edgefield County Hospital Edgefield            (1,339)           11,965 -11.2%
Barnwell County Hospital Barnwell            (1,320)           15,460 -8.5%
Williamsburg Regional Hospital Kingstree            (1,427)           17,299 -8.2%
Georgetown Memorial Hospital Georgetown            (7,011)         113,894 -6.2%
Hillcrest Memorial Hospital Simpsonville            (2,801)           46,339 -6.0%
Greenville Memorial Hospital Greenville          (40,134)         791,410 -5.1%
Cannon Memorial Hospital Pickens            (1,941)           39,123 -5.0%
Colleton Medical Center Walterboro            (3,182)           64,602 -4.9%
Lake City Community Hospital Lake City            (1,283)           28,860 -4.4%
Greer Memorial Hospital Greer            (2,984)           67,558 -4.4%
Abbeville Area Medical Center Abbeville            (1,358)           31,335 -4.3%
Medical University Hospital Charleston          (43,385)      1,039,404 -4.2%
Chesterfield General Hospital Cheraw            (1,514)           36,356 -4.2%
Providence Hospital Columbia          (10,745)         260,234 -4.1%
Beaufort Memorial Hospital Beaufort            (6,016)         147,302 -4.1%
Kershaw County Medical Center Camden            (4,132)         107,234 -3.9%
Laurens County Memorial Hospital Clinton            (2,731)           80,895 -3.4%
Oconee Medical Medical Center Seneca            (3,823)         124,727 -3.1%
Palmetto Health Richland Columbia          (17,076)         706,934 -2.4%
Tuomey Regional Medical Center Sumter            (4,015)         188,667 -2.1%
Springs Memorial Hospital Lancaster            (2,692)         130,641 -2.1%
Hampton Regional Medical Center Varnville              (358)           19,638 -1.8%
Roper St Francis Mount Pleasant Mt Pleasant              (823)           45,628 -1.8%
Baptist Easley Easley            (1,651)           99,787 -1.7%
McLeod Dillon Dillon              (362)           37,820 -1.0%
The Regional Medical Center Orangeburg            (1,590)         195,903 -0.8%





Total all 32 In-The-Red Abandoned
       (236,638)      4,740,067 -5.0%

The excellent South Carolina website breaks down its Hospitals between its 41 Urban and 19 Rural.  The 41 Urban Hospitals generated a Total Operating Income from Patient Services Margin of 4.5% of Total Revenues.  The 19 Rural Hospitals had a comparable negative Margin of (6.1)%.....yeah, that's a swing of 10.6%.

When you have so many severely struggling South Carolina Hospitals, the responsible thing to do is to deal with them and not ignore them.  So far, the State of South Carolina has decided to ignore them.....a Katrina-like strategy.

By far the best and only economically good way to put a major dent in the Operating Losses of the so many South Carolina severely struggling Hospitals is for the State of South Carolina to fully expand Medicaid and do so as quickly as possible.  If South Carolina did this, with the resultant massive inflow of Patient Revenues from Medicaid expansion, the struggling South Carolina Hospitals would be able to substantially reduce their huge Operating Losses and an overwhelming majority of them should even be able to turn their substantial losses into profits.  And the South Carolina Hospitals with very modest Operating Income would have their profits bolstered very robustly.

If South Carolina were to fully expanded Medicaid, one of the key beneficiaries of the resultant very healthy profit improvement and thus also Total Net Assets improvement of all South Carolina Hospitals would be South Carolina citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth from Medicaid expansion would give all South Carolina 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.