The Richest Hospitals
There’s big money in health care
“Most hospitals lose money, but there are a few very profitable ones
and we need to pay attention to why they are making so much.”
— Gerard Anderson, (Johns Hopkins health policy professor)
No. 1
That’s Incredible!
The American Hospital Directory found that 24 hospitals in America with over 200 beds make a 25 percent or more profit margin. That profit margin is about the same as “Big Pharma,” an industry that is often criticized for its profits.
No. 2
Power Pricing
According to The Hill, in 2010 consumer prices finally dropped for the first time in 54 years. Despite this fact, the national health bill actually rose a little over 5 percent to $2.47 billion. This is due to the quiet provider consolidation that big hospitals are engaged in.
Princeton economist Alain Enthoven told Bloomberg that “provider consolidation is driving up health care costs. … We need effective antitrust enforcement, and we haven’t had that for some time.”
The Players
1. Flowers Hospital
Dothan, Alabama
235 beds
For-profit parent: Community Health Systems (Brentwood, Tennessee)
53 percent operating margin
$389 million
2. Del Sol Medical Center
El Paso, Texas
314 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
45 percent operating margin
$243 million
3. Rochester Methodist Hospital
Rochester, Minnesota
336 beds
Nonprofit parent: Mayo Health (Rochester, Minnesota)
37 percent operating margin
$389 million
4. 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
5. Seton Medical Center
Austin, Texas
447 beds
Nonprofit parent: Ascension Health (St. Louis, Missouri)
34 percent operating margin
$389 million
6. Swedish Medical Center
Englewood, Colorado
367 beds
For-profit parent: HealthONE (Denver, Colorado)
33 percent operating margin
$447 million
7. Doctors Hospital of Augusta
Augusta, Georgia
287 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
31 percent operating margin
$283 million
8. Ohio State University Hospital
Columbus, Ohio
1,009 beds
Nonprofit parent: University Medical Center (Columbus, Ohio)
32 percent operating margin
$1.98 billion
9. Saint Mark’s Hospital
Augusta, Georgia
317 beds
For-profit parent: Hospital Corporation of America (Nashville, Tennessee)
33 percent operating margin
$272 million
10. Northridge Hospital Medical Center
Northridge, California
424 beds
Nonprofit parent: Catholic Healthcare West (San Francisco, California)
30 percent operating margin
$458 million
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.”
And that’s just the way it is.
It’s true hospitals in the last 20 years have been discreetly consolidating to monopolize their local health care 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?