Monday, April 14, 2014

Oregon Non-Profit Hospital Organizations Net Income 8.9% of Revenues in 2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 3 Oregon Non-Profit Hospital Organizations with Net Assets above $400 mil each.

These 3 Oregon Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very strong 8.9% of Total Operating Revenues in 2013.

The only problem with these strong operating results in 2013 for these Oregon Non-Profit Hospital Organizations was that instead of taking the high road and responsibly reducing their Patient Service Pricing, these Oregon Non-Profit Hospital Organizations elected to retain these excessively high Bottom Line Profits, which also added to both their Net Assets and their treasure chest of Investments in Stocks and Bonds.

Below are the Bottom Line Net Income and Total Operating Revenues for each of these 3 Oregon Non-Profit Hospital Organizations for 2013:

Most 2013

Recent  Bottom  2013 2013

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

 mil $s   mil $s  %
Non-Profit Hospitals

Asante Health System Medford Sep 13                 67               541 12.4%
Oregon Health & Science Univ Portland Jun 13               208            2,170 9.6%
Legacy Health System Portland Mar 13                 89            1,365 6.5%

Total all 3

              364            4,076 8.9%

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

Thus a key beneficiary of this should be Oregon 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 Oregon 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 Oregon 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 Oregon's case which should drive down Health Insurance Premiums on the Health Insurance Exchange even more.  Oregon 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.