When we think about hospitals, doctors, and almost anything dealing with the healthcare system, we think of all the money that’s exchanging hands. And for good reason–the healthcare industry raked in nearly $3 billion in 2022! The richest hospitals in the US are a mix of profit and non-profit hospitals or parent companies and many are affiliated with universities.
Oddly enough, less than half of US hospitals actually turn a profit. There are a variety of reasons for this, including the number of beds, the percentage of uninsured patients, research capabilities, and so on.
The 10 Richest Hospitals in the US
Here’s a rundown of the 10 richest hospitals in the US. We’ve included the number of staffed beds they offer, profit margins, and profit status.
Ohio State University Hospital
Columbus, Ohio
1,009 beds
Nonprofit parent: University Medical Center (Columbus, Ohio)
32 percent operating margin
$1.98 billion
Northridge Hospital Medical Center
Northridge, California
424 beds
Nonprofit parent: Catholic Healthcare West (San Francisco, California)
30 percent operating margin
$458 million
Swedish Medical Center
Englewood, Colorado
367 beds
For-profit parent: HealthONE (Denver, Colorado)
33 percent operating margin
$447 million
Northridge Hospital Medical Center
Northridge, California
424 beds
Nonprofit parent: Catholic Healthcare West (San Francisco, California)
30 percent operating margin
$458 million
Flowers Hospital
Dothan, Alabama
235 beds
For-profit parent: Community Health Systems (Brentwood, Tennessee)
53 percent operating margin
$389 million
Rochester Methodist Hospital
Rochester, Minnesota
336 beds
Nonprofit parent: Mayo Health (Rochester, Minnesota)
37 percent operating margin
$389 million
St. Luke’s Hospital
Cedar Rapids, Iowa
532 beds
Nonprofit parent: UnityPoint Health (formerly known as Iowa Health System), Des Moines, Iowa
36 percent operating margin
$389 million
Seton Medical Center
Austin, Texas
447 beds
Nonprofit parent: Ascension Health (St. Louis, Missouri)
34 percent operating margin
$389 million
Saint Mark’s Hospital
Augusta, Georgia
317 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
33 percent operating margin
$272 million
Doctors Hospital of Augusta
Augusta, Georgia
287 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
31 percent operating margin
$283 million
Del Sol Medical Center
El Paso, Texas
314 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
45 percent operating margin
$243 million
How Do the Richest Hospitals in the US Get So Rich?
The top hospitals on this list generate their revenue through a combination of factors, including patient care services, research activities, philanthropy, and investments. Let’s take a quick look at factors that come into play.
- Patient Care Services
- Research
- Donations
- Educational Programs
- Related Revenue
- Management
Patient Health Care Services
Hospitals in the United States rely on patient care services as their primary source of revenue. This includes a wide range of medical treatments, surgeries, diagnostics, hospital stays, consultations, and more. These services are crucial for patients who need them, and they also play an essential role in keeping hospitals financially viable.
These charges can differ depending on factors like the type of service, acute care, the complexity of the treatment, and the type of insurance the patient has. However, premium hospitals have started offering specialized, groundbreaking services that set them apart. This has attracted patients who are seeking unusual treatments that might be unavailable elsewhere. Naturally, these innovative services can cost more than regular ones.
When paying for patient care services, there are a couple of options available. Patients can choose to pay for their services out-of-pocket, or they can use insurance or government-funded programs like Medicare or Medicaid to cover the cost. Medicare and Medicaid offer medical services to patients who are insured or covered by government-funded healthcare programs.
This system is designed to make medical care more accessible and affordable for those who need it most. By choosing to go through an insurance or government-funded program, patients can alleviate some of the burden of paying for expensive medical procedures and treatments.
Research and Clinical Trials
Prestigious hospitals have been at the forefront of medical research and innovation for decades. By collaborating with pharmaceutical companies, government agencies, and other institutions, these hospitals have turned into research centers to conduct clinical trials and research studies.
Such partnerships have not only helped these hospitals to generate revenue but have also led to numerous breakthroughs in the medical field. With access to cutting-edge technology, skilled professionals, and ample resources, hospitals are able to conduct research projects that help to improve and save countless lives.
These collaborations have paved the way for new treatments, cures, and diagnostic tools that have revolutionized the healthcare industry. Research grants can make a big impact on these hospitals. This funding not only contributes to the success of the hospital but also has the potential to positively impact the larger medical community.
Donations
Wealthy hospitals are often deeply invested in their surrounding communities, and thanks to their strong ties, they tend to receive significant donations from a variety of sources. These donations can be put towards a variety of important initiatives, including financing medical research or funding community health programs.
The additional funds can also be used to upgrade hospital technology and expand facilities to provide better care to even more people. Thanks to the generosity of individual donors, foundations, and large corporations, these hospitals can remain on the cutting edge of medical breakthroughs.
Educational Programs
Affiliations between some of the richest hospitals in the US and universities provide an excellent opportunity for medical students to gain extensive experience. Medical schools can offer programs like residencies, fellowships, and other educational opportunities for students to learn. Through these affiliations, the universities and teaching hospitals have the opportunity to generate income through world-class educational programs.
Students benefit from the opportunity to work in well-equipped facilities with experienced professionals who offer hands-on guidance and medical insights. Additionally, the medical school receives recognition for its quality programs, which can improve future employment opportunities for students.
Other Revenue
Hospitals are known for their ability to provide exceptional care to patients, but not all money comes from net patient revenue. They also have the potential to generate income through various other services. On-site pharmacies, cafeterias, and gift shops are just a few examples of services offered to both patients and visitors.
While they may not contribute as much as other services, they are contributing factors to the overall health of hospital finances. Providing these amenities not only offers convenience for those utilizing hospital services but also allows for additional revenue streams to support the hospital’s mission of providing quality care.
Management
The importance of effective hospital management cannot be understated. While it may mean different things to different people, it can ultimately determine the financial health of a hospital. Mismanagement can lead to loss of revenue through negligence, irresponsibility, and even unethical behavior.
On the other hand, a well-run hospital often sees increased profitability. At the end of the day, it is important to remember that hospitals are businesses with bottom lines that impact patient care and the ability to invest in improving amenities and services. Sound management practices are therefore critical to both financial success and the overall health and well-being of the communities they serve.
When discussing hospital finances, it’s crucial to remember that there isn’t a one-size-fits-all approach. Each hospital’s financial strategy and revenue sources can differ significantly. Along with this, the healthcare industry’s financial landscape can fluctuate with various factors such as healthcare policies, reimbursement rates, and market dynamics.
Keeping track of these changes is essential for hospitals as they adapt and ensure a stable financial system. In the end, it’s clear that the vital role hospitals play in our lives requires a careful and ever-changing balance of financial considerations. These considerations also play a part in how profitable smaller clinics can be as well.
The Richest Hospitals in the US: Making America Healthy
According to Lisa Goldstein, head of health care bond ratings at Moody’s Investors Service, “A strategy aimed at quality (for-profit hospitals) can result in improved market share, better ability to recruit and retain physicians, lower nursing vacancy/turnover rates, and improved financial performance.”
It’s true hospitals in the last 20 years have been discreetly consolidating to monopolize their local healthcare markets. This gives them the power to dictate prices at will. Generally, almost all evolved countries have some form of socialized medicine and are generally more healthy than Americans.
Are they all wrong?