- In a study of 2,993 acute care hospitals, seven out of the 10 most profitable hospitals were nonprofits, according to research published in Health Affairs.
- The three highly profitable hospitals that were for-profit corporations were Medical City Dallas Hospital, Swedish Medical Center, and Methodist Hospital.
- Fifty-five percent of the studied hospitals lost money delivering patient care, according to the analysis, which was based on fiscal year 2013 reports and data from CMS on the acute care hospitals (59% were nonprofit; 25% were for-profit; and 16% were public).
According to the study's results, the 10 most profitable hospitals each earned more than $163 million in total profits attributed to patient care services.
Some of the factors associated with hospital profitability from patient care services included prestige, system affiliation, regional power, average length-of-stay, and whether a state regulates prices.
Considering hospital care is almost a third of the country's total healthcare spending and has increased by 4% to $972 billion from 2013 to 2014, study co-author Ge Bai, an assistant professor of accounting at Washington and Lee University told the Associated Press it is important to know which hospitals are making money and how they are affected by public policy.
Cities in New Jersey, Michigan, Wisconsin, and Illinois are currently considering hospital tax break bills, according to the AP.
Nonprofit hospitals matter to a region. Urbana Mayor Laurel Prussing reported an 11% loss of the Illinois city's assessed tax value when nonprofit Carle Foundation Hospital stopped paying $6.5 million yearly in property taxes. "We need to question this whole idea of what not-for-profit means," Prussing said. "This is a highly profitable business that manages to not pay taxes."
On the other hand, Carle Foundation Hospital spokeswoman Jennifer Hendricks-Kaufmann told the AP the research "considers only one year and omits important details."
The study authors recommended that consumers be skeptical about hospital consolidation.
"It may mean hospitals can be more efficient and have higher quality," Bai told the AP. The authors concluded their findings suggest "hospital consolidation reduces competition, increases hospitals’ regional power with private insurers, and leads to higher insurance premiums."