Monday, April 14, 2014

Utah Non-Profit Hospital Organizations Net Income 14.0% of Revenues in 2013 and 12.0% For 4 Years 2010-2013

From a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 2 Utah Non-Profit Hospital Organizations with Net Assets above $400 mil each.

These 2 Utah Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a spectacularly off-the-charts 14.0% of Total Operating Revenues in 2013, 12.5% in 2012 and 12.0% for the most recent 4 years combined (2010-2013)

These spectacular Net Income Margin Percentages were substantially higher that of the 30 Dow Industrials combined.

These spectacular operating results were driven by IHC Health Services (IHC).

The only problem with these exceptional operating results of the IHC Non-Profit Hospital Organization in both 2013 and for all 4 years combined was that instead of taking the high road and responsibly reducing its Patient Service Pricing, IHC elected to retain these excessively high Bottom Line Profits, which also added to both its Net Assets and its treasure chest of Investments in Stocks and Bonds.

Below are the Bottom Line Net Income and Total Operating Revenues for both of these Utah Non-Profit Hospital Organizations for 2013, for 2012 and for the most recent 4 years combined:


4 Year

Most 2013


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
Utah 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

IHC Health Services Salt Lake City  Dec 13      712     4,252 16.7%
    589     4,056 14.5%
    2,170     15,751 13.8%
University Utah Hospitals & Clinics Salt Lake City Jun 13       43     1,141 3.8%
      45     1,007 4.5%
       188       3,939 4.8%

Total of both

    755     5,393 14.0%
    634     5,063 12.5%
    2,358     19,690 12.0%

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

Thus a key beneficiary of this should be Utah 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 IHC 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 the IHC Non-Profit Hospital Organization, 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.