Friday, April 11, 2014

Ohio Non-Profit Hospital Organizations Net Income 10.4% of Revenues in 2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 13 Ohio 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.

An amazingly high 4 of these 13 Ohio Non-Profit Hospital Organizations.....Nationwide Children's Hospital, Catholic Health Partners, Kettering Health Network and University Hospitals Health System..... still haven't published their December 2013 financial statements yet and thus I only included for 2013 below their 9 months ended September 30, 2013 operating data.  When they publish their December 2013 financial statements, I'll then update the amounts included in the chart below.

These 13 Ohio Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a superb 10.4% of Total Operating Revenues in 2013, which exceeded that of the 30 Dow Industrials combined. 

The main contributor to these outstanding operating results in 2013 was the huge renown Cleveland Clinic which posted a Net Income Margin of a superb 14.0% in 2013.  And there were 3 other Ohio Non-Profit Hospital Organizations which registered Bottom Line Net Income Margins in 2013 which were even higher than Cleveland Clinic's 14.0%.

The only problem with these exceptional operating results in 2013 was that instead of taking the high road and responsibly reducing their Patient Service Pricing, these Ohio 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 13 Ohio Non-Profit Hospital Organizations for 2013, for 2012 and for the most recent 4 years combined:











4 Year



Most 2013


2012


2010-13 4 Year 4 Year


Recent Bottom 2013 2013
Bottom 2012 2012
Bottom 2010-13 2010-13


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



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












Nationwide Children's Hospital Columbus Dec 13     200     1,199 16.7%
    209     1,489 14.0%
    640       5,178 12.4%
ProMedica Health Care Toledo Dec 13     228     1,421 16.0%
    282     1,405 20.1%
    838       5,389 15.6%
OhioHealth Columbus Jun 13     380     2,529 15.0%
    233     2,372 9.8%
 1,319       9,204 14.3%
Cleveland Clinic Health System Cleveland Dec 13     900     6,450 14.0%
    614     6,187 9.9%
 2,285     24,064 9.5%
Children'sHospitalMedCtrAkron Akron Dec 13       81        623 13.0%
      47        580 8.1%
    206       2,200 9.4%
Premier Health Partners Dayton Dec 13     141     1,764 8.0%
      98     1,818 5.4%
    384       7,204 5.3%
CincinnatChildren'sHospMedCtr Cincinnati Jun 13     153     1,932 7.9%
    129     1,811 7.1%
    399       7,040 5.7%
Catholic Health Partners Cincinnati Dec 13     221     2,873 7.7%
    303     3,819 7.9%
    738     13,674 5.4%
Kettering Health Network Dayton Dec 13       72        956 7.5%
      46     1,228 3.7%
    210       4,337 4.8%
Univ Hospitals Health System Cleveland Dec 13     110     1,729 6.4%
      54     2,266 2.4%
    308       8,068 3.8%
Summa Health System Akron Dec 13       52     1,397 3.7%
      56     1,359 4.1%
    198       5,314 3.7%
Christ Hospital Health Network Cincinnati Jun 13       17        762 2.2%
      17        681 2.5%
      21       2,632 0.8%
UC Health  Cincinnati Jun 13       26     1,206 2.2%
    164     1,155 14.2%
    169       4,142 4.1%














Total all 13

 2,581   24,841 10.4%
 2,252   26,170 8.6%
 7,715     98,446 7.8%

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

Thus a key beneficiary of this should be Ohio citizens electing to buy health insurance on the Health Insurance Exchange.  This exceptional Net Asset growth driven by these exceedingly high Bottom Line Profits gives these Ohio Hospital Organizations 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 Ohio 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.

And there's an added factor in Ohio's case which should drive down Health Insurance Premiums on the Health Insurance Exchange even more.  Ohio passed full Medicaid expansion and there is an additional real beauty with full Medicaid expansion.  It increases nearly every Hospital's profits so much that Hospitals just have to reduce their Hospital charges very substantially and they also will be much more reasonable in negotiating Hospital Charges with Health Insurance Companies.  Thus it is only logical that this will also result in much lower Health Insurance Premiums on the Health Insurance Exchange.