Virginia Non-Profit Hospitals Net Assets Up 115% Under Obama and the Affordable Care Act

From a review of the Electronic Municipal Market Access (EMMA), I found 9 Non-Profit Hospital Organizations headquartered in the State of Virginia with Net Assets (i.e. Financial Strength or Total Assets minus Total Liabilities) at the most recent date reported in 2013 of more than $400 mil each.  Below here are the Net Assets of these 9 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
Inova Health System	Falls Church	VA	Mar 14	4,237		Dec 08	1,885	125%
Sentara HealthCare	Norfolk	VA	Mar 14	3,775		Dec 08	1,489	154%
Virginia Commonwealth Univ Health	Richmond	VA	Dec 13	1,489		Jun 09	756	97%
Virginia Hospital Center Arlington	Arlington	VA	Dec 13	727		Dec 08	351	107%
Valley Health System	Winchester	VA	Dec 13	740		Dec 08	434	71%
Carilion Clinic	Roanoke	VA	Dec 13	641		Sep 09	357	80%
St Marys Hospital	Richmond	VA	Aug 13	558		Aug 09	373	50%
Centra Health	Lynchburg	VA	Dec 13	526		Dec 08	233	126%
Augusta Health Care	Augusta County	VA	Dec 13	415		Dec 08	229	81%
Total all 9				13,108			6,107	115%

As you can see from the above chart, the Total Net Assets (Financial Strength) of these 9 Virginia Non-Profit Hospital Organizations increased by a phenomenal 115% to $13.108 bil during their average 4.81 years so far of the Obama Administration.

Four of these 9 Virginia Hospitals had their Net Asset growth more than double so far during the Obama Administration.

The lowest Net Asset growth over the Obama Administration of the 9 Virginia Hospitals was a very strong 50%.

Very positively impacting this major increase in the Net Assets (Financial Strength) of these 9 Virginia 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 9 Virginia 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 substantial Net Asset percentage increases of these 9 Virginia Hospitals, a key beneficiary of this will be Virginia citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth gives these Virginia 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 Virginia

A very late find was the University of Virginia Medical Center.  It wasn't included above since I couldn't find any disclosure in EMMA for its Net Assets amount.  All I could find is that the Total Net Assets of the University of Virginia Medical Center increased by a huge $463 mil during the most recent 4 fiscal years through June 30, 2013.....all completely during the Obama Administration.

The University of Virginia is a Non-Profit Governmental Entity and thus so is its University of Virginia Medical Center.

From its financial statements included in Emma, below here are the Total Operating Revenues, Total Operating Expenses and Bottom Line Income of the University of Virginia Medical Center for each of the most recent 4 Fiscal Years (FYs):

University of Virginia Medical Center					Total
					Four
	FY 2013	FY 2012	FY 2011	FY 2010	FYs
	mil $s	mil $s	mil $s	mil $s	mil $s
Operating Revenues	1,240	1,185	1,095	1,059	4,579
Operating Expenses	1,150	1,100	1,000	972	4,222
=Operating Income	90	85	95	87	357
Non-Operating Revenues	13	1	66	26	106
Bottom Line Income	103	86	161	113	463
Bottom Line Profit as a % of Total Operating Revenues	8.3%	7.3%	14.7%	10.7%	10.1%

Whoa, this is pretty crazy for a Non-Profit Governmental Hospital to generate Bottom Line Income as a Percentage of the Related Operating Revenues for the most recent 4 years of an excessively high 10.1%, which is even a little bit higher than the Total Bottom Line Profit Margin of the 30 pristine Dow Industrials.  It tells you why the US has a huge Health Care Cost problem and it also tells you that the Hospital and Other Health Care Patients and the Businesses and the US Government covering them are all getting ripped off by the University of Virginia Medical Center's exorbitant pricing of hospital and other health care procedures.

Which takes me finally to a very positive aspect of the extremely high University of Virginia Medical Center's Bottom Line Profits as well as the resultant massive build-up of the Net Assets of the University of Virginia Medical Center.

With such substantial Total Net Assets dollar increases of the University of Virginia Medical Center, one of the key beneficiaries of this will be Virginia citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth gives the University of Virginia Medical Center 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. 

Virginia Struggling Hospitals

The State of Virginia is being very transparent with its citizens by having available for review annually at its Health Information website very detailed financial information on each of its 81 Short-term Acute Care and Critical Access Hospitals.

Overall, the 81 Virginia Hospitals had a Total Operating Income as a Percentage of Total Revenues of 7.6% for 2012, which is second to only Wisconsin's 8.2% highest of any US State.  And these 81 Virgina Hospitals' Total Operating Income of $1.253 bil in 2012 was burdened with an Earnings Charge of $1.152 bil due to Provisions for Bad Debts.  In addition, their Total Uncompensated Charity Care Charges Foregone were another $2.348 bil in 2012. 

But you have to stratify these Hospitals to find out what is really going on with Virginia Hospitals.

First, let's look at the upper end Virginia Hospitals.

There were 22 of these 81 Virginia Hospitals which generated Operating Income as a Percentage of Total Operating Revenues of above 10.0% in 2012.  I'll call these Top 22 the Pure Gold Hospitals.  In the aggregate, they generated Total Operating Income of 13.5% of Total Operating Revenues.....that's about 40% 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.  Here are the Top 22:

				Operating
		Operating	Total	Income
		Income	Operating	(Loss)
Virginia Hospital	City	(Loss)	Revenues	Margin
		$000s	$000s	%
Pure Gold Hospitals
Bedford Memorial Hospital	Bedford	6,126	29,150	21.0%
Riverside Regional Medical Center	Newport News	77,380	400,516	19.3%
Riverside Walter Reed Hospital	Gloucester	10,467	54,593	19.2%
Reston Hospital Center	Reston	51,200	281,318	18.2%
Inova Fair Oaks Hospital	Fairfax	42,989	264,553	16.2%
LewisGale Hospital Montgomery	Blacksburg	13,490	85,726	15.7%
Sentara Leigh Hospital	Norfolk	34,449	233,680	14.7%
Carilion New River Valley Med Ctr	Christiansburg	21,648	150,079	14.4%
Augusta Health	Fishersville	33,177	230,941	14.4%
Prince William Hospital	Manassas	28,812	200,626	14.4%
Community Memorial Healthcenter	South Hill	8,102	59,162	13.7%
CJW Medical Center	Richmond	85,160	628,950	13.5%
LewisGale Medical Center	Salem	36,570	275,058	13.3%
Norton Community Hospital	Norton	6,766	51,911	13.0%
Wythe County Community Hospital	Wytheville	5,268	42,104	12.5%
Inova Loudon Hospital	Leesburg	29,303	236,721	12.4%
Clinch Valley Medical Center	Richlands	6,850	59,908	11.4%
Inova Alexandria Hospital	Alexandria	36,664	321,648	11.4%
Henrico Doctors' Hospital	Richmond	50,319	454,474	11.1%
VCU Health System	Richmond	121,185	1,099,566	11.0%
Sentara Careplex Hospital	Hampton	22,912	215,637	10.6%
Bon Secours Mary Immaculate Hosp	Newport News	17,281	166,265	10.4%
Total all 22 Pure Gold Hospitals		746,118	5,542,586	13.5%

But you get a completely different story when you look at the bottom portion of these 81 Virginia Hospitals.  I'll call them the In-The-Red Virginia Hospitals.

Of the 81 Virginia Hospitals, an amazingly high 28 of them, or 35% of them, are In-The-Red.....each of them posting Operating Losses in 2012.  Here are the 28 In-The-Red Virginia Hospitals:

				Operating
		Operating	Total	Income
		Income	Operating	(Loss)
Virginia Hospital	City	(Loss)	Revenues	Margin
		$000s	$000s	%
In-The-Red Hospitals
Bath  County Community Hospital	Hot Springs	(2,506)	11,224	-22.3%
Southern Virginia Reg Medical Ctr	Emporia	(5,812)	29,133	-19.9%
Smyth County Community Hospital	Marion	(6,026)	32,279	-18.7%
Cumberland Hospital for Children	New Kent	(3,928)	22,431	-17.5%
Spotsylvania Regional Med Center	Fredericksburg	(13,680)	80,897	-16.9%
Southampton Memorial Hospital	Franklin	(6,040)	36,093	-16.7%
Dickenson Community Hospital	Clintwood	(672)	4,885	-13.8%
Mountain View Reg Medical Ctr	Norton	(3,045)	22,216	-13.7%
Russell County Medical Center	Lebanon	(2,562)	23,366	-11.0%
Riverside Shore Memorial Hospital	Nassawadox	(5,104)	47,193	-10.8%
Twin County Regional Hospital	Galax	(3,141)	30,195	-10.4%
Bon Secours DePaul Medical Ctr	Norfolk	(15,217)	148,102	-10.3%
Stafford Hospital Center	Stafford	(5,732)	70,157	-8.2%
Valley Health Shenandoah Meml Hosp	Woodstock	(3,342)	43,177	-7.7%
Buchanan General Hospital	Grundy	(1,522)	21,251	-7.2%
Page Memorial Hospital	Luray	(1,046)	21,971	-4.8%
Danville Regional Medical Center	Danville	(5,680)	132,084	-4.3%
Wellmont Lonesome Pine Hospital	Big Stone Gap	(1,440)	35,485	-4.1%
John Randolph Medical Center	Hopewell	(2,723)	67,403	-4.0%
Valley Health Warren Memorial Hosp	Front Royal	(1,172)	52,143	-2.2%
Mary Washington Hospital	Fredericksburg	(7,980)	396,872	-2.0%
Pioneer Community Hospital Patrick	Stuart	(99)	10,087	-1.0%
Inova Mount Vernon Hospital	Alexandria	(1,094)	157,818	-0.7%
Carilion Giles Community Hospital	Pearisburg	(122)	24,815	-0.5%
Johnston Memorial Hospital	Abingdon	(285)	113,623	-0.3%
Carilion Tazewell Community Hosp	Tazewell	(26)	11,786	-0.2%
Rappahannock General Hospital	Kilmarnock	(31)	33,447	-0.1%
Chesapeake Regional Medical Center	Chesapeake	(153)	240,298	-0.1%
Total all 28 In-The-Red Hospitals		(100,180)	1,920,431	-5.2%

When you have 35% of your State Hospitals generating Operating Losses, 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 many Virginia struggling Hospitals is for the State of Virginia to fully expand Medicaid and do so as quickly as possible.  If Virginia did this, with the resultant massive inflow of Patient Revenues from Medicaid expansion, the struggling Virginia 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 Virginia Hospitals with very modest Operating Income would have their profits bolstered very robustly.

If Virginia 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 Virginia Hospitals would be Virginia citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth from Medicaid expansion would give all Virginia 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.