| FYE | Balance | Net | ||||||
| Most | Balance | Sheet | Assets | |||||
| Most | Recent | Sheet | Net | % | ||||
| Recent | Balance | Date | Assets | Change | ||||
| Balance | Sheet | Beginning | Beginning | During | ||||
| City | State | Sheet | Net | Obama | Obama | Obama | ||
| Hospital Organization | HQs | HQs | Date | Assets | Admin | Admin | Admin | |
| mil $s | mil $s | |||||||
| University Kansas Hospital | Kansas City | KS | Jun 14 | 779 | Jun 09 | 422 | 85% | |
| Olathe Medical Center | Olathe | KS | Jun 14 | 448 | Dec 08 | 208 | 115% | |
| Total of both | 1,227 | 630 | 95% |
As you can see from the above chart, the Total Net Assets (Financial Strength) of these 2 Kansas Non-Profit Hospital Organizations increased by a very impressive 95% to $1.227 bil so far during the Obama Administration.
Very positively impacting this very robust increase in the Net Assets (Financial Strength) of these 2 Kansas Hospital Organizations were actions taken by both the Obama Administration and the US Fed to strengthen the US Financial Foundation which was severely damaged from the financial meltdown in late 2008.
In addition, the Affordable Care Act (ACA) has also played a key role in this very impressive increase in Net Assets (Financial Strength) of these 2 Kansas Non-Profit Hospital Organizations.
A remarkable thing is that these very robust increases in Net Assets (Financial Strength) of these Non-Profit Hospital Organizations occurred when these Non-Profit Hospitals were also playing very instrumental roles in the substantial annual percentage growth reduction of Total US Health Care Costs which occurred in each of the most recent three years under the ACA.
With such impressive Net Asset percentage increases of these 2 Kansas Hospitals, a key beneficiary of this has been and will continue to be Kansas citizens electing to buy health insurance on the Health Insurance Exchange. This strong Net Asset growth gives these Kansas Hospitals the financial flexibility to moderate their pricing for hospital 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.
Also, from a review of audited annual financial statements shown at Electronic Municipal Market Access (EMMA), I found 2 Kansas Non-Profit Hospital Organizations with Net Assets above $400 mil each and which have audited financial statements for each of the most recent 4 years.
These 2 Kansas Non-Profit Hospital Organizations generated Total Bottom Line Net Income of a very robust 9.2% of Total Operating Revenues in 2012 and also a lower but still solid 6.7% in 2013.
This exceptional 9.2% Bottom Line Profit Margin in 2012 is really just about one Non-Profit Hospital Organization.....Olathe Medical Center (OMC), which posted a Net Income Margin of an off-the-charts 17.3% in 2012 and an even better 20.3% for the 9 months ended September 30, 2013.
When you analyze OMC's 17.3% Net Income Margin in 2012, OMC's Operating Income was only $8 mil. However OMC's Investment Returns were an incredibly higher $34 mil in 2012. Thus OMC's Investment Returns are accounting for over 80% of OMC's 17.3% Bottom Line Profit Margin in 2012.
The only problem with these exceptional operating results of OMC in 2012 and 2013 was that instead of taking the high road and responsibly reducing their Patient Service Pricing, OMC 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 these 2 Kansas Non-Profit Hospital Organizations for 2013 and for 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 | |||
| Kansas Hospital Organ | City HQs | End | Income | Revenues | Margin | Income | Revenues | Margin | |
| mil $s | mil $s | % | mil $s | mil $s | % | ||||
| Non-Profit Hospitals | |||||||||
| University Kansas Hospital | Kansas City | Jun 13 | 49 | 1,163 | 4.2% | 76 | 1,062 | 7.2% | |
| Olathe Medical Center | Olathe | Sep 13 | 42 | 202 | 20.8% | 47 | 272 | 17.3% | |
| Total of both | 91 | 1,365 | 6.7% | 123 | 1,334 | 9.2% |
Clearly OMC is the exception but Kansas has so many struggling Hospitals especially its many rural ones.
Kansas Struggling Hospitals
Also from EMMA, I found 23 Kansas Non-Profit Hospital Organizations with Total Operating Revenues of more than $10 mil in their most recent fiscal year. Nine of them generated Operating Income as a Percentage of Total Operating Revenues of less than 2.0% in the most recent fiscal year, as you can see in the below chart:
| Most | |||||
| Recent | |||||
| Operating | Annual | ||||
| Operating | Total | Income | Fiscal | ||
| City | Income | Operating | (Loss) | Year | |
| HQs | (Loss) | Revenues | Margin | End | |
| mils $s | mils $s | % | |||
| Kansas Non-Profit Hospitals | |||||
| Meade Hospital District | Meade | (1.8) | 12 | -15.0% | Dec12 |
| Rooks County Health Center | Plainville | (0.4) | 11 | -3.6% | Dec12 |
| Wilson County Hospital | Neodesha | (0.4) | 11 | -3.6% | Dec12 |
| Hiawatha Hospital Assoc | Hiawatha | (0.6) | 22 | -2.7% | Dec12 |
| Labette County Med Center | Parsons | (0.1) | 56 | -0.2% | Dec12 |
| Fredonia Regional Hospital | Fredonia | - | 12 | 0.0% | Dec12 |
| Memorial Health System | Abilene | 0.3 | 27 | 1.1% | Dec13 |
| South Central Kansas Med Ctr | Arkansas City | 0.2 | 17 | 1.2% | Dec12 |
| Anderson County Hospital | Garnett | 0.3 | 17 | 1.8% | Dec12 |
The best and only way to substantially strengthen these struggling Kansas Hospitals is for the State of Kansas to fully expand Medicaid.
A key side benefit to Kansas citizens of Kansas Medicaid expansion is that the resultant profit enhancements and thus Net Asset enhancements to all of Kansas's Hospitals would give them the financial flexibility to moderate their pricing for hospital 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.
