These 3 South Dakota Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very respectable 6.6% of Total Operating Revenues in 2013 and a very modest 4.5% in 2012.
It should be pointed out that these are modest Bottom Line Profits of these largest, financially strongest Louisiana 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.
To illustrate this latter point, Avera Health posted Total Investment Returns of $57 mil in 2013 included in Non-Operating Income, which exceeded its Total Operating Income of only $44 mil also in 2013.
As a second illustration, Regional Health posted Total Investment Returns of $42 mil in 2013 included in Non-Operating Income, which more than tripled its Total Operating Income of only $13 mil also in 2013.
Sanford Health's Bottom Line Earnings in 2013 included an economic gain on new affiliations of $120 mil.
Below are the Bottom Line Net Income and Total Operating Revenues for each of these 3 South Dakota Non-Profit Hospital Organizations for both 2013 and 2012:
| Most | 2013 | 2012 | |||||||
| Recent | Bottom | 2013 | 2013 | Bottom | 2012 | 2012 | |||
| Fiscal | Line | Total | Net | Line | Total | Net | |||
| Year | Net | Operating | Income | Net | Operating | Income | |||
| South Dakota Hospital Organ | City HQs | End | Income | Revenues | Margin | Income | Revenues | Margin | |
| mil $s | mil $s | % | mil $s | mil $s | % | ||||
| Non-Profit Hospitals | |||||||||
| Regional Health | Rapid City | Dec 13 | 57 | 542 | 10.5% | 43 | 531 | 8.1% | |
| Avera Health | Sioux Falls | Dec 13 | 144 | 1,391 | 10.4% | 63 | 1,301 | 4.8% | |
| Sanford Health | Sioux Falls | Dec 13 | 134 | 3,106 | 4.3% | 91 | 2,517 | 3.6% | |
| Total all 3 | 335 | 5,039 | 6.6% | 197 | 4,349 | 4.5% |
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, South Dakota is one State whose large Non-Profit Hospital Organizations are not, for the most part, being greedy in generating high profits.
With South Dakota generating such modest profits, a key beneficiary will be South Dakota citizens buying health insurance on the Health Insurance Exchange. South Dakota 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.
