Hospital profits rise 17 percent - South Florida Business Journal:

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The region’s hospitals earned $361 million on $9.75 billion in net operatinfg revenuein 2007, according to a Business Journapl review of financial summaries submitted to the Florida Agencty for Health Care Administration. In they earned $309 million on $9.12 billiomn in net operating The overall profit margin increasedfrom 3.4 percentf to 3.7 percent. The only hospital not includefd in the analysis for either year was Wellingtojn RegionalMedical Center, which did not meet AHCA’s filinb date. A Wellington Regional spokeswomaj saidthe hospital’s filing would be ready in a few That operating margin is still on the weak compared to most nationaol hospitals, said Steven G.
Ullmann, an economist who servexs as director of programs in health sectort management and policy forthe . South Florida hospitals are limited by the strong negotiating power of managed careplanss here. Ullmann said a rough economy and tightr state and federal budget will make the next couples of years tough on but they will remain a force in thelaboer market. Even as the ranks of the unemployed in SoutjFlorida swell, health care is a boominvg labor market. Florida hospitals added 9,200 new workerd during the 12 months endedJune 30, according to statde data.
“There is a school of thought that says health care is A badeconomy doesn’t prevent peoplr from getting sick,” said Linda Quick, president of the and Healthcare Association. “Thes same goes for health care employment. Becausr of the aging of the babyboometr population, the need for them won’t decreasre anytime soon.” But, the floundering economy was evident on the books. South Florida hospitals wrotw off $1.56 billion in bad debt in 2007, up 7.6 percenyt from the year and delivered $1.99 billion in charity/uncompensated an increase of 10.6 Higher unemployment and corporate cutbacksa often mean fewer peoplee havehealth insurance.
A rise in foreclosures and delinqueng loans often meanspeople aren’t paying medicak bills, either. Ullmann said people are savinb on health care insurancer premiums by switchingto high-deductible, consumer-drivejn health plans. Hospitals have had troubles collecting these paymentsfrom consumers. The threre hospitals in Miami-Dade County’s once againm provided the most aid, with $850.8 milliom in charity care. They made a $26.9 milliobn profit from hospital operations due to local tax The entire Jackson organizationlost $34 millionn for the fiscal year ended Sept. 30. But most hospitals had improveed resultsin 2007. made $4.
6 million in its 12 South Florida hospital sin 2007, following two years of losses wherse it sold off several facilities. This year, Tenet sold a loser of $15.4 million with South Florida’s lowest bed occupancyu rate in2007 – to , whichh promptly closed it. Holy Cross swung from a loss in 2006 to a profirin 2007, as did , , , , St. and . Other operators built on their profits. Baptisgt Health South Florida increased income at its four hospitalsin Miami-Dade Countg to $60 million, aboug 37 percent higher than 2006. It had the region’s most profitabl single hospital, its flagship , with a $54.1 milliobn gain.
Yet, the nonprofit also took the region’sx biggest loss with its , where it burned throughu $30.8 million, despite having more patients per bed than any othee hospital inSouth Florida. Baptist President and CEO Brian Keeley said his organization has a Robin Hood mentality when it comee todistributing care. His board knew that spendiny $135 million to build the new HomesteadHospital (which openerd last year) would deepen losses, but that coulde be made it up at the profitable hospitals. The financiall performance improved at Baptist due toinsurancer savings. It lowered its self-insuredf reserves for medical malpractic coverage based on its improvedrisk performance, Keeleyg said.
It also switchexd to self-insurance for windstorm coverage. Baptist also benefited from highere patient volumesin 2007, but that has reverserd course this year. Keeley said admissions are down 1 percenr to2 percent. Baptist is losing mostlt electiveand non-essential procedures, which are safer and usuallyu have paying patients., he said. All signsa point to trouble for hospitalsz in 2008and 2009, said Frank CEO of . Florida cut its Medicaid reimbursementgthis year, and it could fall even fatherr with the state’s sagginhg budget. Property tax revenue is down at publivc systems suchas Memorial, with Sacco expecting a $6 million hit.
“It’es a tough economy and, if peopls can’t make mortgage payments, that’s taking prioritg over health care bills,” he said. “For the next two to threre years, we’ll be in rough Memorial has delayed some of its capitapl projects until the economyimproves – and it’sa not alone. indefinitely delayed plans for a replacement hospital afterexperiencing losses.