Illinois Non-Profit Hospital Organizations Net Income 10.8% of Revenues in 2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 14 Illinois Non-Profit Hospital Organizations with Net Assets above $400 mil each and which had or will very shortly have audited financial statements in each of the most recent 4 years.

Unlike Non-Profit Hospital Organizations in so many other US States, the finance function in Illinois Non-Profit Hospital Organizations appears to be top caliber, with very clear disclosures and incredibly timely filings of financial statements on EMMA.

These 14 Illinois Non-Profit Hospital Organizations generated Total Bottom Line Net Income of an exceptional 10.8% of Total Operating Revenues in 2013 and of a superb 9.9% for the most recent 4 years combined.  These exceptionally strong Net Income Margins even exceeded that of the 30 Dow Industrials combined.

The main contributors to these outstanding operating results in both 2013 and in the 4 years combined were Oak Brook-based Advocate HealthCare Network and Chicago-based Northwestern Memorial Health Care.  Incredibly, 8 of these 14 Illinois Non-Profit Hospital Organization posted Net Income Margins of 10.0% or higher in both 2013 and for the 4 years combined.

The only problem with these exceptional operating results in both 2013 and for all 4 years combined was that instead of taking the high road and responsibly reducing their Patient Service Pricing, these Illinois 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 14 Illinois 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
Illinois 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
Little Co Mary Hosps&Healthcare	Evergreen Park	Jun 13	54	199	27.1%		14	194	7.2%		194	793	24.5%
Northwestern Memorial Health	Chicago	Aug 13	309	1,710	18.1%		122	1,702	7.2%		878	6,654	13.2%
Advocate HealthCare Network	Oak Brook	Dec 13	765	4,938	15.5%		672	4,596	14.6%		2,399	18,267	13.1%
Cadence Health	Winfield	Jun 13	147	1,127	13.0%		103	1,007	10.2%		489	3,452	14.2%
St George	Palos Heights	Dec 13	47	391	12.0%		47	375	12.5%		168	1,480	11.4%
University Chicago Med Ctr	Chicago	Jun 13	141	1,337	10.5%		140	1,290	10.9%		692	4,954	14.0%
Memorial Health System	Springfield	Sep 13	79	760	10.4%		93	755	12.3%		232	2,926	7.9%
Southern Illinois Healthcare	Carbondale	Mar 13	44	439	10.0%		9	385	2.3%		165	1,544	10.7%
Northwest Community Healthcare	Arlington Heights	Sep 13	41	483	8.5%		57	493	11.6%		87	1,891	4.6%
Hospital Sisters Health System	Springfield	Jun 13	168	2,008	8.4%		(12)	1,930	-0.6%		473	7,636	6.2%
NorthShore Univ Health System	Evanston	Sep 13	126	1,816	6.9%		192	1,756	10.9%		523	6,773	7.7%
Rush University Medical Center	Chicago	Jun 13	111	1,838	6.0%		67	1,747	3.8%		427	6,887	6.2%
Children'sMemorialChicagoMedCtr	Chicago	Aug 13	43	759	5.7%		72	713	10.1%		318	2,771	11.5%
OSF Healthcare System	Peoria	Sep 13	67	1,999	3.4%		160	1,904	8.4%		245	7,297	3.4%
Total all 14			2,142	19,804	10.8%		1,736	18,847	9.2%		7,290	73,325	9.9%

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

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