Sunday, April 13, 2014

Missouri Non-Profit Hospital Organizations Net Income 13.2% of Revenues in 2013 and 9.1% For 4 Years 2010-2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 11 Missouri 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.

These 11 Missouri Non-Profit Hospital Organizations generated US generally accepted accounting principles (US GAAP) Total Bottom Line Net Income of a spectacularly off-the-charts 13.2% of Total Operating Revenues in 2013, which was substantially higher that of the 30 Dow Industrials combined.   For the most recent 4 years combined (2010-2013), their Total Bottom Line Net Income Margin was an exceptional 9.1%.

Four of these 11 Missouri Non-Profit Hospital Organizations posted Bottom Line Net Income Margins above 10.0% both in 2013 and in the most recent 4 years combined.

The main driver of this off-the-charts Net Income Margin in 2013 was the massive Ascension Health, whose Hospitals are all over the US.  BJC Healthcare was the second main driver of this exceptional operating performance in 2013.

Ascension Health's US GAAP Bottom Line Net Income in 2013 included an economic gain of $2.022 bil related to its business combinations.

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, most of these Missouri 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 11 Missouri Non-Profit Hospital Organizations for 2013 and for the most recent 4 years combined:

4 Year

Most 2013

2010-13 4 Year 4 Year

Recent Bottom 2013 2013
Bottom 2010-13 2010-13

Fiscal Line Total Net
Line Total Net
Year Net Operating Income
Net Operating Income
Missouri Hosp Organ City HQs End Income Revenues Margin
Income Revenues Margin

mil $s mil $s %
mil $s mil $s %
Non-Profit Hospitals

Ascension Health Edmundson Jun 13          3,145        17,097 18.4%
       6,920        60,734 11.4%
BJC Healthcare St Louis Dec 13             491          3,908 12.6%
       1,522        14,849 10.2%
St. Francis Med Ctr Cape Girardeau Jun 13               48             427 11.2%
          174          1,508 11.5%
Heartland Regnl Med Ctr St Joseph Jun 13               61             550 11.1%
          224          2,000 11.2%
Mercy Health Chesterfield Jun 13             415          4,381 9.5%
       1,114        15,976 7.0%
CoxHealth Springfield Sep 13             105          1,163 9.0%
          214          4,050 5.3%
St Luke's Health Syst Kansas City Dec 13               94          1,291 7.3%
          258          4,669 5.5%
Univ Missouri Health Care Columbia Jun 13               45             706 6.4%
          166          2,580 6.4%
Children's Mercy Hospitals Kansas City Dec 13               50             913 5.5%
          199          4,256 4.7%
SSM Health Care St Louis Dec 13             127          3,815 3.3%
          542        13,051 4.2%
North KC Hosp Kansas City Jun 13               10             457 2.2%
          100          1,766 5.7%

Total all 11

         4,591        34,708 13.2%
      11,433       125,439 9.1%

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

Thus a key beneficiary of this should be citizens electing to buy health insurance on the Health Insurance Exchange.  These citizen beneficiaries are not just Missouri citizens, but also many citizens in other US States including ones in Michigan, Indiana, Florida, Tennessee, Texas and Alabama, since Ascension Health has Hospitals located all over the country, including more than 1,000 acute beds in each of those 6 US States.  This exceptional Net Asset growth driven by these exceedingly high Bottom Line Profits gives these Missouri and Ascension Health Hospitals located in many other US States 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 Missouri 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.

Details to come.