Tuesday, April 15, 2014

Nevada Hospital Organizations Total Operating Losses of 1.0% of Revenues For Most Recent 5 Years Combined

From a review of the excellent Nevada Dept of Health and Human Services website, all Nevada Hospitals combined reported the following amounts for Total Operating Income and Total Operating Revenues for each of the most recent 5 years:




Total Nevada Income

Operating Total (Loss)

Income Operating  Margin
Year (Loss) Revenues %

mil $s mil $s

2013 36.5             4,668 0.8%
2012 -6.7             4,593 -0.1%
2011 -44.8             4,362 -1.0%
2010 -100.3             4,198 -2.4%
2009 -107.6             4,110 -2.6%

5 Year Total -222.9           21,931 -1.0%

The only good thing I can say about the above numbers is that they are improving.  When all of a State's Hospitals combined lose $223 mil over the most recent 5 years, you have a very serious health care delivery problem.  This is very depressing and clearly says that Nevada Hospitals have just been crushed financially starting with the 2008 financial meltdown and still desperately need help.

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 extremely poor operating results for all of Nevada's Hospitals in total, Nevada is clearly one State whose Hospital Organizations, for the most part, are not being greedy in generating high profits.

But on the very positive side here, with Nevada Hospitals generating such horrible operating results for the most recent 5 years, a key beneficiary will be Nevada citizens electing to buy health insurance on the Health Insurance Exchange.  Nevada Hospitals have not been nor will they be baking in excessive Hospital profits demands in their negotiations with health insurance companies on pricing for hospital and other health care 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 Nevada has wisely elected to fully expand Medicaid.  This will increase nearly all Nevada Hospital profits substantially and thus permit Nevada 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.