One of these 3 Arizona Non-Profit Hospitals.....Scottsdale Healthcare.... still hasn't published its September 2013 financial statements yet and thus I only included for 2013 below its 9 months ended June 30, 2013 operating data. When it publishes its September 2013 financial statements, I'll then update the amounts included in the chart below.
These 3 Arizona Non-Profit Hospital Organizations generated Total Bottom Line Net Income of an spectacular 14.8% of Total Operating Revenues in 2013 and of another spectacular 12.2% in 2012. These exceptionally strong Net Income Margins even exceeded by quite a bit that of the 30 Dow Industrials combined.
The main contributor to these outstanding operating results in both 2013 and in 2012 was Banner Health.
The only problem with these exceptional operating results in both 2013 and in 2012 was that instead of taking the high road and responsibly reducing their Patient Service Pricing, these Arizona 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 Arizona Non-Profit Hospital Organizations for 2013, for 2012 and for the most recent 4 years combined:
| 4 Year | |||||||||||||
| Most | 2013 | 2012 | 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 | ||||
| Arizona 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 | |||||||||||||
| Banner Health | Phoenix | Dec 13 | 833 | 5,085 | 16.4% | 601 | 4,866 | 12.4% | 1,841 | 19,308 | 9.5% | ||
| Northern Arizona Healthcare | Flagstaff | Jun 13 | 54 | 535 | 10.1% | 53 | 517 | 10.3% | 238 | 2,058 | 11.6% | ||
| Scottsdale Healthcare | Scottsdale | Sep 13 | 39 | 652 | 6.0% | 109 | 851 | 12.8% | 209 | 3,161 | 6.6% | ||
| Total all 3 | 926 | 6,272 | 14.8% | 763 | 6,234 | 12.2% | 2,288 | 24,527 | 9.3% |
There is a very positive aspect to these excessively high Bottom Line Profits of these Arizona Non-Profit Hospital Organizations. These incredibly high Profits are getting added to the Net Assets (Financial Strength) of these Arizona Hospital Organizations.
Thus a key beneficiary of this should be Arizona 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 Arizona 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 Arizona Non-Profit Hospital Organizations, 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.
And there's an added factor in Arizona's case which should drive down Health Insurance Premiums on the Health Insurance Exchange even more. Arizona passed full Medicaid expansion and there is an additional real beauty with full Medicaid expansion. It increases nearly every Hospital's profits so much that Hospitals just have to reduce their Hospital charges very substantially and they also will be much more reasonable in negotiating Hospital Charges with Health Insurance Companies. Thus it is only logical that this will also result in much lower Health Insurance Premiums on the Health Insurance Exchange.
Details to come.
