Day: September 3, 2010

Forbes: Austin’s Seton Medical Center one of most profitable hospitals in U.S.

September 2nd, 2010 1:24 pm CT

Austin’s Seton Medical Center is one of the most profitable hospitals in the country, according to a new list from Forbes magazine.

Seton Medical Center ranks fifth on the list, based on an operating margin of 34 percent. Net patient revenue for the 405-bed hospital is $432 million, according to Forbes.

Seton Medical Center, Austin’s largest hospital, is part of the Austin-based Seton Family of Hospitals, whose nonprofit parent is St. Louis-based Ascension Health Inc.

The Forbes list, done by the American Hospital Directory, is based on operating income figures that hospitals must report to the federal Medicare program each year. It found that 24 hospitals in the country with more than 200 beds each make an operating margin at least 25 percent.

The most profitable hospital in the country, Flowers Medical Center in Dothan, Ala., recorded an operating margin of 53 percent, according to Forbes.

Five other Texas hospitals appeared on the Forbes list of the 25 most profitable hospitals: Del Sol Medical Center in El Paso, No. 2 (45 percent operating margin); Conroe Regional Medical Center, No. 16 (28 percent), Medical Center of Plano, No. 17 (28 percent); Medical City Hospital in Dallas, No. 19 (26 percent); and Las Palmas Medical Center in El Paso, No. 23 (25 percent).

“Some say profitable hospitals may be using local monopoly to overcharge insurers and patients,” the magazine reported. “Others see the high profits simply as [a] sign of efficiency and good quality.”

San Antonio Employer Elects Cost-Plus To Save Money

Conference of Methodist Churches of the Southwest decided yesterday to move their group health plan from a traditional PPO model to a cost-plus program.

This is another San Antonio employer who has joined the Cost-Plus Revolution. Bill Miller Bar B Q of San Antonio was the first employer in Texas to transition their self-funded group medical plan to a cost-plus platform – Bill Miller Forbes.

The list of prominent San Antonio employers who have  followed the Bill Miller BBQ example is impressive, and growing.

Another large San Antonio employer will be joining the Cost-Plus Revelution on January 1, 2011.

Hospital profit report ranks some North Texas centers high, some low; findings draw challenges

 
12:00 AM CDT on Thursday, September 2, 2010
By JASON ROBERSON / The Dallas Morning News
jroberson@dallasnews.com

North Texas is home to hospitals with the nation’s best and worst operating margins.

Medical Center Plano and Medical City Dallas Hospital, both owned by Nashville-based Hospital Corporation of America, have profit margins between 26 and 28 percent. They rank among the top 25 in the nation, according to an American Hospital Directory report that Forbes magazine published this week.

However, John Peter Smith Hospital in Fort Worth has the nation’s third-worst profit margin at minus 204 percent. Parkland Memorial Hospital in Dallas ranks 14th-worst with minus 74 percent. Both are county hospitals.

“A lot of this comes down to how they do the analysis,” said John Dragovits, executive vice president at Parkland.

After crunching the data from Forbes’ list, Dragovits realized that the hospital’s tax revenue – more than $400 million annually – had been omitted from the calculations.

A hospital’s operating margin is its income divided by revenue, expressed as a percentage. It’s an important measuring stick for ranking efficiency among competitors.

A higher operating margin tends to indicate a lower cost of running a hospital. It says the hospital can deliver health care to patients more cheaply than competitors can and make money.

But in an era of rising health care costs and assigning blame, being recognized for high operating profit margin is not necessarily a compliment.

Some top-ranking hospitals took issue with the report.

“We’re not clear how the numbers were derived, but our margin is significantly lower than what is stated in Forbes,” said Mark Whitley, a senior vice president of the North Texas division for Hospital Corporation of America.

“We are proud that the Medical Center of Plano and Med City Dallas Hospital, as well as our other HCA North Texas hospitals, have strong clinical and administrative teams who run great hospitals.”

Flowers Hospital in Dothan, Ala., No. 1 on the list with an operating margin of 53 percent, is disputing its ranking, according to the Dothan Eagle. The hospital says that its revenue was misreported and that the actual operating margin is 12 percent.

Hospitals with stronger operating margins do not necessarily provide better care.

In a U.S. Department of Health and Human Services measurement of hospital death rates among heart-failure patients, hospitals with lower operating margins, such as Parkland and JPS, were in line with the national average, as were Medical City Dallas and Medical Center Plano, with higher margins.

Most of the hospitals with the worst operating margins are county hospitals in states with high percentages of uninsured residents. Texas, which leads the nation with a 25 percent uninsured rate, has six hospitals on the list.