Kaiser still the big­gest not-for-profit sys­tem

Modern Healthcare - - BY THE NUMBERS - By Michael San­dler

Kaiser Foun­da­tion Hos­pi­tals again topped Mod­ern Healthcare’s largest not-for-profit hos­pi­tal sys­tems list in 2014, based on to­tal rev­enue, while Catholic Health Ini­tia­tives saw a big rev­enue in­crease fu­eled by an ac­qui­si­tion.

Oak­land, Calif.-based Kaiser lever­aged its in­te­grated provider-in­surer model and saw a 6% in­crease in to­tal rev­enue and to­tal op­er­at­ing rev­enue over 2013. Plan mem­ber­ship also grew, from 9.1 mil­lion in 2013 to 9.6 mil­lion in 2014, the first year of the Af­ford­able Care Act cov­er­age ex­pan­sion.

“The big con­tinue to be big,” said Ken Gacka, a di­rec­tor at Stan­dard & Poor’s.

While Kaiser topped the list, other not-for-profit sys­tems ex­pe­ri­enced larger growth. En­gle­wood, Colo.based CHI en­joyed a 29.2% in­crease in to­tal rev­enue over the prior year. CHI’s surge was as­so­ci­ated with its ac­qui­si­tion of Hous­ton-based St. Luke’s Epis­co­pal Health Sys­tem in April 2013. CHI spent $1 bil­lion to es­tab­lish the Epis­co­pal Health Foun­da­tion as part of the deal, and also agreed to pay St. Luke’s $1 bil­lion for cap­i­tal im­prove­ments.

The num­ber of hos­pi­tals in the CHI sys­tem grew from 74 to 93 in 2014, with a 3.7% in­crease in staffed beds.

The Univer­sity of Cal­i­for­nia Health Sys­tem saw a 14.5% in­crease in to­tal rev­enue last year, with its hos­pi­tals ex­pe­ri­enc­ing higher pa­tient vol­umes. The UC Davis Med­i­cal Cen­ter in Sacra­mento cred­ited the ACA Med­i­caid ex­pan­sion and an in­crease in con­tracted pay­ment rates for its 7%-plus in­crease in to­tal op­er­at­ing rev­enue and net pa­tient ser­vice rev­enue.

Kevin Hol­lo­ran, se­nior di­rec­tor at S&P, said a U.S. Supreme Court rul­ing strik­ing down fed­eral pre­mium sub­si­dies in up to 37 states us­ing the fed­eral in­sur­ance ex­change would not se­verely hurt not-for-profit hos­pi­tal sys­tem in­come. For one, hos­pi­tals in states such as Cal­i­for­nia and New York run­ning their own ex­changes would not be af­fected. And for hos­pi­tals and health sys­tems in states that rely on the fed­eral ex­change, the ex­change busi­ness hasn’t been around long enough or pro­vided a large enough pa­tient vol­ume to have a se­ri­ous im­pact, he said.

Still, he added, “sys­tems have seen a slight gain, fi­nan­cially, and more peo­ple are get­ting cov­ered.”

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