Thursday, April 10, 2014

Texas Non-Profit Non-County District Hospital Organizations Net Income 11.7% of Revenues in 2013

 From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 13 Non-Profit, Non-County District Texas Hospital Organizations with Net Assets above $400 mil each.

I didn't include the excessively profitable University of Texas System Hospitals and Clinics below since I couldn't find their separate financial statements in EMMA.

These 13 Non-Profit Non-County District Texas Hospital Organizations generated Total Bottom Line Net Income in 2013 which was an amazingly high 11.7% of Total Operating Revenues, which was up quite a bit from the comparable 7.2% Income Margin in 2012.  For the most recent 4 years combined, this Total Bottom Line Profit Margin was a still much too high 8.7%.

The two main drivers of this sky high 10.1% Total Profit Margin in 2013 were Houston-based The Methodist Health System at 26.1%, Fort Worth-based Cook Children's Health at 23.4% and Arlington-based Texas Health Resources at 20.0%.

Altogether 8 of these 13 Texas Non-Profit Hospital Organizations generated Bottom Line Net Income Margins of 11.9% or higher in 2013.  All 8 of them had Bottom Line Profit Margins exceeding that of the 30 Dow Industrials combined.  And all 8 of them had double-digit Percentage Bottom Line Net Income Margins for the most recent 4 years combined.  Instead of taking the high road and responsibly reducing their Patient Service Pricing, these 8 Texas 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 Texas 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
City Year Net Operating Income
Net Operating Income
Net Operating Income
Texas Hospital Organization 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


























…..Non-County District Hospitals









The Methodist Hospital System Houston Dec 13     684     2,616 26.1%
    387     2,331 16.6%
    1,527       9,103 16.8%
Cook Children's Health Fort Worth Sep 13     282     1,205 23.4%
    279     1,127 24.8%
       875       4,162 21.0%
Texas Health Resources Arlington Dec 13     768     3,846 20.0%
    483     3,725 13.0%
    1,845     13,964 13.2%
Children's Med Ctr Dallas Dallas Dec 13     215     1,151 18.7%
    146     1,052 13.9%
       594       4,099 14.5%
United Regional Health Care Wichita Falls Dec 13       52        293 17.7%
      40        279 14.3%
       167       1,135 14.7%
Methodist Health System Dallas Sep 13     177     1,086 16.3%
    159        969 16.4%
       465       3,776 12.3%
Texas Children's Hospital Houston Sep 13     303     2,340 12.9%
    216     2,044 10.6%
       764       7,678 10.0%
Baylor Health System Dallas Jun 13     489     4,124 11.9%
    220     3,846 5.7%
    1,659     15,260 10.9%
Memorial Hermann Healthcare Houston Jun 13     170     3,578 4.8%
    154     3,351 4.6%
       713     13,025 5.5%
Christus Health Irving Jun 13     160     3,701 4.3%
     (41)     3,596 -1.1%
       393     14,377 2.7%
Baylor College of Medicine Houston Jun 13       41     1,365 3.0%
   (150)     1,272 -11.8%
     (207)       5,063 -4.1%
East Texas Medical Center Tyler Oct 13       21        971 2.2%
      12        942 1.3%
         95       3,715 2.6%
Scott & White Healthcare Temple Aug 13      (58)     2,062 -2.8%
      16     2,047 0.8%
         91       7,828 1.2%














Total all 13 Non-County District Hospitals
 3,304   28,338 11.7%
 1,921   26,581 7.2%
    8,981   103,185 8.7%

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

Thus a key beneficiary of this should be Texas 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 Texas 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 Texas Non-Profit Hospital Organizations in the past 4 years, 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.