These 11 Massachusetts Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a modest 6.3% of Total Operating Revenues in 2013 and an even more modest 4.9% in 2012.
Ten of the 11 Massachusetts Non-Profit Hospital Organizations posted a Bottom Line Profit Margin of below 6.0% each in 2013.
It should be pointed out that these are modest Bottom Line Profits of these largest, financially strongest Massachusetts Hospital Organizations which even include very robust Investment Returns due to the hot stock market in both 2013 and in late 2012, and thus on an Operating Income (Loss) basis, these Profits are substantially lower in both 2013 and in 2012.
To illustrate this point, by far the largest of these Massachusetts Hospital Organizations is the very prestigious Partners HealthCare System, which had Total Investment Returns of $195 mil in 2013 included in Non-Operating Income, which was higher than its Total Operating Income of $158 mil also in 2013.
And to further illustrate this point, Boston-based Children's Medical Center posted Total Investment Returns of $324 mil in 2013 included in Non-Operating Income, which was more than triple the Total Operating Income of $84 mil also in 2013.
Partners HealthCare System's 2013 Bottom Line Net Income included a $254 mil economic gain from new affiliations.
Below are the Bottom Line Net Income and Total Operating Revenues for each of these 11 Massachusetts Non-Profit Hospital Organizations for both 2013 and 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 | |||
| Massachusetts Hospital Organ | City HQs | End | Income | Revenues | Margin | Income | Revenues | Margin | |
| mil $s | mil $s | % | mil $s | mil $s | % | ||||
| Non-Profit Hospitals | |||||||||
| Children's Med Ctr&Hospital | Boston | Sep 13 | 382 | 1,790 | 21.3% | 229 | 1,769 | 12.9% | |
| Lahey Clinic Medical Center | Burlington | Sep 13 | 62 | 1,047 | 5.9% | 55 | 1,036 | 5.3% | |
| Partners Healthcare System | Boston | Sep 13 | 600 | 10,346 | 5.8% | 352 | 8,981 | 3.9% | |
| CareGroup Healthcare System | Boston | Sep 13 | 137 | 2,462 | 5.6% | 144 | 2,390 | 6.0% | |
| Cape Cod Healthcare | Hyannis | Sep 13 | 37 | 674 | 5.5% | 53 | 680 | 7.8% | |
| Dana-Farber Cancer Institute | Boston | Sep 13 | 56 | 1,034 | 5.4% | 23 | 987 | 2.3% | |
| Covenant Health Systems | Lexington | Dec 13 | 30 | 581 | 5.2% | 27 | 585 | 4.6% | |
| Baystate Medical Center | Springfield | Sep 13 | 71 | 1,716 | 4.1% | 93 | 1,634 | 5.7% | |
| UMass Memorial HealthCare | Worchester | Sep 13 | 75 | 2,186 | 3.4% | 54 | 2,228 | 2.4% | |
| Boston Medical Center | Boston | Sep 13 | 20 | 1,012 | 2.0% | 9 | 975 | 0.9% | |
| SouthCoast Health System | New Medford | Sep 13 | 12 | 834 | 1.4% | 35 | 790 | 4.4% | |
| Total all 11 | 1,482 | 23,682 | 6.3% | 1,074 | 22,055 | 4.9% |
More than anything, Hospital Patient Charges drive US Health Care Costs. When you view a typical US Hospital bill for patient services, it is easy to understand why US Health Care Costs are so much higher than that in any other major country.
One reason US Hospital bills are so high is that many of the larger Non-Profit Hospitals Systems set their pricing for hospital procedures so that they make a lot of money and retain it tax free, further increasing their already massive treasure chest of Investments in Equity and Debt Securities, which also grow tax free.
Thus, US Hospitals are playing a key role in determining ultimately whether health insurance premiums are fairly priced on the health insurance exchanges.
Well, as you can see from the above very modest profit amounts along with my earlier discussion of them, Massachusetts clearly is one State whose large Non-Profit Hospital Organizations are not being greedy in generating high profits.
With Massachusetts Hospitals generating such modest profits, a key beneficiary will be Massachusetts citizens buying health insurance on the Health Insurance Exchange. Massachusetts Hospitals, for the most part, have not been nor will they be baking in excessive Hospital profits demands in their negotiations with health insurance companies on pricing for hospital procedures which ultimately determines what insurance premiums are set by health insurance companies on the Health Insurance Exchange.
Another factor which will help keep insurance premium prices reasonable in the Health Insurance Exchange is that Massachusetts has wisely elected to expand Medicaid. This will increase nearly all Massachusetts Hospital profits substantially and thus permit Massachusetts Hospitals to be even more reasonable in their negotiations with health insurance companies on pricing for hospital and other health care procedures which ultimately drives what health insurance premiums are set at by health insurers on the Health Insurance Exchange.
