These 6 Tennessee Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very modest 4.8% of Total Operating Revenues in 2013 and an even more very modest 4.1% in 2012.
It should be pointed out that these are modest Bottom Line Profits of these largest, financially strongest Tennessee 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, by far the most profitable of these 6 Tennessee Hospital Organizations is Methodist Le Bonheur Healthcare, which had Total Investment Income of $115 mil in 2013 included in Non-Operating Income, almost double its Total Operating Income of $59 mil also in 2013.
Below are the Bottom Line Net Income and Total Operating Revenues for each of these 6 Tennessee Non-Profit Hospital Organizations for both 2013 and 2012:
|Tennessee Hospital Organ||City HQs||End||Income||Revenues||Margin||Income||Revenues||Margin|
|mil $s||mil $s||%||mil $s||mil $s||%|
|Methodist Le Bonheur Healthcare||Memphis||Dec 13||173||1,582||10.9%||123||1,495||8.2%|
|Mountain States Health||Johnson City||Jun 13||60||1,059||5.7%||28||1,014||2.8%|
|West Tennessee Healthcare||Jackson||Dec 13||30||614||4.9%||8||594||1.3%|
|Wellmont Health System||Kingsport||Dec 13||35||798||4.4%||42||788||5.3%|
|Baptist Memorial Health Care||Memphis||Aug 13||20||1,884||1.1%||45||1,824||2.5%|
|Covenant Health||Knoxville||Dec 13||5||789||0.6%||32||1,051||3.0%|
|Total all 6||323||6,726||4.8%||278||6,766||4.1%|
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, Tennessee is clearly one State whose large Non-Profit Hospital Organizations, for the most part, are not being greedy in generating high profits.
With Tennessee Hospitals generating such modest profits, a key beneficiary will be Tennessee citizens buying health insurance on the Health Insurance Exchange. Tennessee 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.