Sunday, April 13, 2014

Minnesota Non-Profit Hospital Organizations Net Income 9.1% of Revenues in 2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 9 Minnesota Non-Profit Hospital Organizations with Net Assets above $400 mil each and which have or will have soon audited financial statements in each of the most recent 4 years.

These 9 Minnesota Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very strong 9.1% of Total Operating Revenues in 2013.

The main contributor to these strong operating results in 2013 was the world class Mayo Clinic.

The only problem with these strong operating results in 2013 for some of these Minnesota Non-Profit Hospital Organizations was that instead of taking the high road and responsibly reducing their Patient Service Pricing, these Minnesota Non-Profit Hospital Organizations elected to retain these excessively high Bottom Line Profits, which also added to both their Net Assets and their treasure chest of Investments in Stocks and Bonds.

Below are the Bottom Line Net Income and Total Operating Revenues for each of these 9 Minnesota Non-Profit Hospital Organizations for 2013: 

Most  2013 


Recent  Bottom   2013   2013 


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



 mil $s   mil $s  %
Non-Profit Hospitals




Centracare Health System St Cloud Jun 13                 149                 938 15.9%
Mayo Clinic Rochester Dec 13              1,185              9,421 12.6%
Allina Health System Minneapolis Dec 13                 326              3,421 9.5%
Children's Hospitals and Clinics Minneapolis Dec 13                   64                 719 8.9%
Fairview Health Services Minneapolis Dec 13                 172              2,511 6.8%
Park Nicollet Health Services St Louis Park Dec 13                   82              1,267 6.5%
Essentia Health Minneapolis Dec 13                   93              1,648 5.6%
North Memorial Health Care Robbinsdale Dec 13                   39                 737 5.3%
HealthPartners Bloomington Dec 13                 252              5,223 4.8%






Total all 9

             2,362            25,885 9.1%

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

Thus a key beneficiary of this should be Minnesota 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 Minnesota 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 some of these Minnesota 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 Minnesota's case which should drive down Health Insurance Premiums on the Health Insurance Exchange even more.  Minnesota 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.