Lexington top Midlands hospital in profits

3rd in SC, makes more than other locals combined

From Staff and Wire ReportsApril 19, 2013 

— Lexington Medical Center is the most profitable hospital in the Midlands, more profitable than the other three hospitals in Richland and Lexington counties combined, according to data posted online Thursday by the state Medicaid agency.

In forms provided to Medicaid, Lexington reported a profit of $205.9 million from 2008-2011, making it the third most profitable hospital in the state. The profit — or what hospitals refer to as operating margin — reflects all services that operate under a hospital’s umbrella. Many hospitals also own nursing facilities, hospice services, home health services, ambulance services, rural clinics or physicians offices.

The 60 acute-care hospitals in the state posted a combined profit from 2008 to 2011 of $2.6 billion.

The data has been available for years in reports filed with the S.C. Department of Health and Human Services. The agency Thursday made the data easy to find on its website to encourage discussions about an industry at the center of the health care debate, director Tony Keck told The Associated Press.

“Local hospital CEOs have presented impassioned pleas for Medicaid expansion because of the effect of the uninsured on their bottom lines, so I thought it was time to take the information we have internally — the information they file with us, their data — and make it public to talk about how their business is performing,” Keck said.

The move aggravated hospital leaders. The S.C. Hospital Association “sees no correlation between the ... release of hospital financial information and the need to help all South Carolina citizens gain access to health coverage,” said Thornton Kirby, president of the association.

“Like any business, a hospital has to earn more than it spends to remain viable and fulfill its mission. Most hospitals reinvest 100 percent of their earnings back into services to meet their communities’ health needs.”

The most profitable hospitals in the state during the 2008-2011 period were Trident Regional Medical Center ($223 million) and Roper Hospital ($207 million), both in Charleston.

All of the large hospitals in Richland, Lexington and Kershaw counties reported net profits over those four years — $90.7 million for Palmetto Health Richland, $36.1 million for Palmetto Health Baptist and $41.1 million for Sisters of Charity Providence and $12.9 million for KershawHealth.

As not-for-profit organizations, those hospitals spend their profits on expansions, equipment, new technology and employee salaries.

The “operating margin goes back into the operation of the hospital to help ensure the excellent level of care we provide,” said Jennifer Wilson, spokeswoman for Lexington Medical Center. She said the hospital has spent $50 million annually in recent years on new equipment and technology, including its new open heart surgery center.

Not all hospitals in the state are profitable. Seventeen of the state’s 60 acute-care hospitals lost money from 2008-2011. Most were small rural hospitals, including Fairfield Memorial Hospital, which lost $6.1 million over that four-year period. The largest loss was $95.7 million recorded by AnMed Health in Anderson.

Keck said he wanted legislators, business groups and the public to have access to hospitals’ financial numbers as the debate over Medicaid expansion under the Affordable Care Act moves to the Senate. The hospital association has been a staunch advocate for Medicaid expansion.

Most of the data already is available on various websites or in hospital public meeting records. But the hospital association feels Keck used out-of-date numbers and didn’t provide important context. Significant changes since 2011 have hit hospital bottom lines, Kirby said.

Medicaid reimbursements to hospitals have been reduced by 7 percent since 2011. Changes prompted by the Affordable Care Act will cut funding for hospital services for the uninsured by $2.6 billion in South Carolina over the next seven years. And the recent fiscal cliff and sequestration cuts by the federal government will cost the state’s hospitals another $695 million over the next 10 years.

“We all know that past performance is no indication of future success,” Kirby said. “This statement is especially relevant to South Carolina hospitals facing billions of dollars in payment cuts regardless of what South Carolina decides regarding Medicaid expansion.”

Gov. Nikki Haley doesn’t want the expansion of Medicaid coverage to hundreds of thousands of additional poor adults, saying the state cannot afford the costs in the years to come. The federal government has promised to pay the full cost for three years, and later fund 90 percent of costs. But the Republican governor doesn’t have the final say; the Legislature does.

Hospital information

Local statistics, based on data provided to Medicaid. For the full spreadsheet for 60 hospitals, go online to www.scdhhs.gov/site-page/transparency-reporting-medicaid.

Profits 2008-2011
Kershaw Health$12,910,560
Lexington Medical Center$205,942,387
Palmetto Health Richland$90,655,641
Palmetto Health Baptist$36,112,686
Sisters of Charity Providence$41,079,382
Toumey Healthcare$12,248,203
Total occupancy rate percentage2011
Kershaw Health59.21
Lexington Medical Center73.97
Palmetto Health Richland77.68
Palmetto Health Baptist70.23
Sisters of Charity Providence50.84
Toumey Healthcare83.27

Source: scdhhs.gov/site-page/%20transparency-reporting-medicaid

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