2010 was a return to the days of healthy profits for Ohio health systems and hospitals, which took a big hit from the recession just two years before.
Net income across about 180 hospitals in the state skyrocketed nearly 12-fold to $2.3 billion, compared with just $208 million in 2008. Profit margins also soared, to 7 percent in 2010 from 0.8 percent two years earlier.
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(The financial numbers are taken from a report on the Ohio healthcare market by Allan Baumgarten, a health policy researcher in Minnesota.)
But of course, 2010 was a more profitable year for some than others, as the two lists below show. The first list, which measures sheer profits, won’t come as much of a surprise, with the state’s largest hospitals dominating. Ohio’s most celebrated hospital, the powerful Cleveland Clinic, tops the list.
The second list, which details the health systems with the highest profit margins, is a bit more interesting — if only for the big numbers. The top two performers enjoyed margins exceeding 20 percent.
While one year could obviously be an anomaly, such huge margins are striking, nonetheless. Hospitals typically average profit margins around 5 percent. The most profitable types of companies in the healthcare sector, big drug manufacturers, post profit margins of about 17 percent.
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Any hospital that enjoys profit margins higher than Big Pharma should consider itself very fortunate.
Baumgarten obtained the data from Medicare cost reports from the U.S. Centers for Medicare & Medicaid Services (CMS). Note that the margins figure represents net income as a percentage of net patient revenues.
2010 profits
1. Cleveland Clinic $535 million
2. OhioHealth (Columbus) $233 million
3. University Hospitals (Cleveland) $228 million
4. Tri Health (Cincinnati) $106 million
5. Nationwide Children’s (Columbus) $97 million
6. Miami Valley (Dayton) $86 million
7. Cincinnati Children’s $64 million
8. St. Rita’s (Lima) $51 million
9. Kettering (Dayton) $51 million
10. Akron’s Children $46 million
2010 profit margins
1. Dayton Children’s Medical Center 22.0%
2. St. Luke’s (Maumee) 21.6%
3. Licking Memorial (Newark) 15.0%
4. St. Elizabeth (Boardman) 14.5%
5. OhioHealth (Columbus) 14.4%
6. St. Rita’s (Lima) 13.7%
7. Nationwide Children’s (Columbus) 12.8%
8. University Hospitals (Cleveland) 12.7%
9. Miami Valley (Dayton) 12.0%
10. Tri Health (Cincinnati) 11.3%
[Photo from Flickr user Images_of_Money]