Report: Colorado Hospitals, HMO's Saw More Profits in '06
April 23, 2008
Denver Business Journal
Sunday, April 13, 2008
Report: Colorado hospitals, HMOs saw more profits in '06Denver Business Journal - by Bob Mook Denver Business Journal
Hospitals and HMOs in Colorado enjoyed healthy profits in 2006 and the first half of 2007, according to a report that studies managed care trends and issues in the state.
According to the Colorado Managed Care Review 2007, released Friday by Minnesota-based health care analyst Allan Baumgarten, hospitals in the Denver area reported a net income of $475 million in 2006 -- or 9 percent of net patient revenues.
Meanwhile, Colorado HMOs posted a net income of $171.9 million -- a profit margin on underwriting revenues of 4.6 percent. Net income for HMOs in 2005 was $73.6 million, or 2.1 percent of underwriting revenues.
Among local hospitals, HealthOne-HCA reported profits of $283.7 million in 2006 or 14.1 percent of net patient revenue. Metro Denver's largest health system, HealthOne-HCA owns and operates seven hospitals in the area,
Two nonprofit health systems serving the area, Centura Health and Exempla Healthcare, also fared well in 2006.
Centura, which operates Saint Anthony Central in Denver and five others in the metro area, reported net income of $55 million -- or 6.2 percent of net patient revenues.
Exempla, which manages Saint Joseph Hospital in Denver as well as medical centers in Wheat Ridge and Lafayette, collected net revenues of $60.2 million or 7.4 percent of net patient revenues.
The survey showed that HMOs in the state posted record profits in 2006 and the first half of 2007, despite declining enrollment.
Among local HMOs, Kaiser Permanente reported the largest revenues in the state with $1.8 billion in 2006 and a net income of $49 million.
Anthem Blue Cross and Blue Shield's HMO Colorado posted $221.6 million in revenue with a net income of $16.4 million.
Enrollment in all Colorado HMOs fell to 972,908 in 2006 -- down 5.6 percent from the previous year. Baumgarten blames the downward enrollment trend on more employers dropping coverage as health coverage becomes more expensive.
Baumgarten attributed the increased profitability among the insurers to a consolidation within the industry because fewer insurance companies in the market gives insurers the upper hand in negotiating favorable charges with hospitals.
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