Sunday, April 13, 2014

Alabama Non-Profit Hospital Organizations Net Income 9.8% of Revenues in 2013 and 10.6% in 2012

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 3 Alabama Non-Profit Hospital Organizations with Net Assets above $400 mil each.

These 3 Alabama Non-Profit Hospital Organizations generated Total Bottom Line Net Income which was an exceptionally high 9.8% of Total Operating Revenues in 2013 and an even higher 10.6% in 2012.  For the most recent 4 years combined, this Total Bottom Line Profit Margin was a still incredibly high 10.0%.

All of these exceptional Alabama Non-Profit Hospital Net Income Margins exceeded that of the 30 Dow Industrials combined.  Instead of taking the high road and responsibly reducing their Patient Service Pricing, two of these 3 Alabama Non-Profit Hospital Organizations elected to retain these excessively high Bottom Line Profits, which also added to both their Net Assets and treasure chest of Investments in Stocks and Bonds.

Below are the Bottom Line Net Income and Total Operating Revenues for each of these 3 Alabama Non-Profit Hospital Organizations for 2013, for 2012 and for the most recent 4 years combined:


4 Year

Most  2013


2010-13 4 Year 4 Year

Recent  Bottom      2013 2013
Bottom 2012 2012
Bottom 2010-13 2010-13

Fiscal  Line   Total  Net
Line Total Net
Line Total Net
Year  Net   Operating  Income
Net Operating Income
Net Operating Income
Alabama Hospital Organ City HQs End  Income   Revenues  Margin
Income Revenues Margin
Income Revenues Margin

 mil $s   mil $s  %
mil $s mil $s %
mil $s mil $s %
Non-Profit Hospitals

UAB Health System Birmingham Sep 13     170     1,287 13.2%
    173     1,203 14.4%
       544       4,622 11.8%
Children's Hospital Alabama Birmingham Dec 13       87        666 13.1%
      64        563 11.4%
       322       2,316 13.9%
City Huntsville Health Care Auth Huntsville Jun 13       29        969 3.0%
      39        844 4.6%
       164       3,337 4.9%

Total all 3 Non-Profit Hospitals

    286     2,922 9.8%
    276     2,610 10.6%
    1,030     10,275 10.0%

There is a very positive aspect to these excessively high Bottom Line Profits of these Alabama Non-Profit Hospital Organizations.  These incredibly high Profits are getting added to the Net Assets (Financial Strength) of these Alabama Hospital Organizations.

Thus a key beneficiary of this should be Alabama citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth driven by these exceedingly high Bottom Line Profits gives these Alabama Hospital Organizations 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.

And armed with audited financial data concerning the excessively high profits earned by these large Alabama Non-Profit Hospital Organizations in the past 4 years, Health Insurance Companies should be able to do a much better job in representing their policy holders, including those getting Health Insurance on the Health Insurance Exchange.