Hospital Profit of Accountable Care Organizations
For the 7th part of my research, I took a look at the hospital profit generated by individual organizations. I specifically looked at established ACO organizations and I compared them to well known non – ACOs. According to the American Hospital Association, hospital profit has significantly decreased over the past decade due to rising healthcare costs (i.e. over-priced equipment, EMR/EHR, pharmaceuticals) and insurance companies refusing to reimburse physicians and hospitals. Health insurance companies are allowed to partner with ACOs. As you will see below, this partnership greatly harms a hospital’s ability to generate revenue and profit.
Hospital Profit Statistics
ACO Profit Stats
Beth Israel Deaconess - $63,670,999
Brigham and Women’s Hospital - $112,099,301
Dartmouth – Hitchcock / Cigna - $46,807,080
Doctors Medical Center / Blue Cross Blue Shield - $8,526,312
Hoag Hospital / Blue Cross Blue Shield - $66,907,352
Methodist Dallas Medical Center / Texas Health Resources - $47,475,524
Norton Hospital / Humana - $7,064,060
St. Joseph’s Hospital (California) / Blue Cross Blue Shield - $25,379,515
Total Profit: $446,193,362
Non-ACO Profit Stats
Centennial Medical Center (HCA) – $102,000,219
Emory University Hospital – $63,015,460
Massachusetts General Hospital – $181,300,000
Ochsner Medical Center – $118,540,792
Tulane Medical Center (HCA) – $41,681,046
University of Alabama Birmingham Hospital - $79,290,315
University of Kentucky – $39,433,980
Vanderbilt University Medical Center – $102,737,396
Total Profit: $612,393,105
Hospital Profit of Non-ACOs higher
Established Accountable Care Organizations make less profit than non accountable care organizations. The evidence above clearly shows that hospitals generate more profit (net income) if they do not become an accountable care organization. Partnering with an insurance company has clearly hurt the ACOs listed above. Hospital CEOs and CFOs should carefully take into consideration the huge financial risks (i.e. significant loss of revenue and profit) that are directly associated with doing business with insurance companies. For a complete summary of my research, please view the post “Accountable Care Organizations Are Failing.”
