These 2 Kansas Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very robust 9.2% of Total Operating Revenues in 2012 and also a lower but still solid 6.7% in 2013.
This exceptional 9.2% Bottom Line Profit Margin in 2012 is really just about one Non-Profit Hospital Organization.....Olathe Medical Center (OMC), which posted a Net Income Margin of an off-the-charts 17.3% in 2012 and an even better 20.3% for the 9 months ended September 30, 2013.
When you analyze OMC's 17.3% Net Income Margin in 2012, OMC's Operating Income was only $8 mil. However OMC's Investment Returns were an incredibly higher $34 mil in 2012. Thus OMC's Investment Returns are accounting for over 80% of OMC's 17.3% Bottom Line Profit Margin in 2012.
The only problem with these exceptional operating results of OMC in 2012 and 2013 was that instead of taking the high road and responsibly reducing their Patient Service Pricing, OMC 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 these 2 Kansas Non-Profit Hospital Organizations for 2013 and for 2012:
| Most | 2013 | 2012 | |||||||
| Recent | Bottom | 2013 | 2013 | Bottom | 2012 | 2012 | |||
| Fiscal | Line | Total | Net | Line | Total | Net | |||
| Year | Net | Operating | Income | Net | Operating | Income | |||
| Kansas Hospital Organ | City HQs | End | Income | Revenues | Margin | Income | Revenues | Margin | |
| mil $s | mil $s | % | mil $s | mil $s | % | ||||
| Non-Profit Hospitals | |||||||||
| University Kansas Hospital | Kansas City | Jun 13 | 49 | 1,163 | 4.2% | 76 | 1,062 | 7.2% | |
| Olathe Medical Center | Olathe | Sep 13 | 42 | 202 | 20.8% | 47 | 272 | 17.3% | |
| Total of both | 91 | 1,365 | 6.7% | 123 | 1,334 | 9.2% |
Clearly OMC is the exception but Kansas has so many struggling Hospitals especially its many rural ones. The only good way this situation changes is for the State of Kansas to fully expand Medicaid.
And there's a substantial side benefit if Kansas were to fully expand Medicaid. It would drive down Health Insurance Premiums for Kansas citizens on the Health Insurance Exchange. Full Medicaid expansion 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.
