Tuesday, April 15, 2014

New Hampshire Non-Profit Hospital Organizations Net Income Only 4.6% of Revenues in 2013 and 3.6% in 2012

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 4 New Hampshire Non-Profit Hospital Organizations with Net Assets above $150 mil each.

These 4 New Hampshire Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very modest 4.6% of Total Operating Revenues in 2013 and a even more modest 3.6% in 2012.

It should be pointed out that these are modest Bottom Line Profits of these largest, financially strongest New Hampshire 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.

Below are the Bottom Line Net Income and Total Operating Revenues for each of these 4 New Hampshire 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
New Hampshire Hospital Organ City HQs End  Income   Revenues  Margin
 Income   Revenues  Margin

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

Wentworth-Douglas Health Dover  Dec 13               27            278 9.7%
             11            271 4.1%
Dartmouth-Hitchcock Lebanon Jun 13              67         1,322 5.1%
             44            956 4.6%
Concord Hospital Concord  Sep 13               12            427 2.8%
             20            410 4.9%
Elliot Health System Manchester Jun 13                7            442 1.6%
              (2)            419 -0.5%

Total all 4

           113         2,469 4.6%
             73         2,056 3.6%

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, New Hampshire is clearly one State whose large Non-Profit Hospital Organizations, for the most part, are not being greedy in generating high profits.

With New Hampshire Hospitals generating such modest profits, a key beneficiary will be New Hampshire citizens buying health insurance on the Health Insurance Exchange.  New Hampshire 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 New Hampshire has wisely elected to effectively expand Medicaid.  This will increase nearly all New Hampshire Hospital profits substantially and thus permit New Hampshire 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.