Thursday, April 17, 2014

Montana Non-Profit Hospital Organizations Net Income Only 6.8% of Revenues in 2013 and 6.1% in 2012

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 2 Montana Non-Profit Hospital Organizations with Net Assets above $200 mil each.

These 2 Montana Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very reasonable 6.8% of Total Operating Revenues in 2013 and a more modest 6.1% in 2012.

Below are the Bottom Line Net Income and Total Operating Revenues for both of these Montana Non-Profit Hospital Organizations for both 2013 and 2012:

Most 2013


Recent  Bottom  2013 2013
 Bottom  2012 2012

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

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

Benefis Health System Great Falls  Dec 13               15            329 4.6%
             17            341 5.0%
Bozeman Deaconess Health Services Bozeman  Dec 13               22            213 10.3%
             16            197 8.1%

Total of both

             37            542 6.8%
             33            538 6.1%

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 modest profit amounts, Montana is one State whose larger Non-Profit Hospital Organizations, for the most part, are not being greedy in generating high profits.

With Montana Hospitals generating such modest profits, a key beneficiary will be Montana citizens buying health insurance on the Health Insurance Exchange.  Montana 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.