Minnesota Health System Hospitals Record Nearly 11% Margin in 2010

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The hospital consolidation trend could have benefits for a hospital's bottom line, as hospitals affiliated with the six largest health systems in Minnesota reported $652.7 million in net income in 2010 — a profit margin of 10.8 percent, according to a Pioneer Press report.

Some of the financially strongest hospitals were within Rochester, Minn.-based Mayo Clinic, Duluth, Minn.-based Essentia Health and Sanford Health, which is based in Fargo, N.D., and Sioux Falls, S.D., but has some hospitals in Minnesota. In each of those systems, hospitals recorded a cumulative $1 billion or more in net patient revenue during 2010, according to the report.

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Some of the hospitals indicated that the report, which was conducted by healthcare analyst Allan Baumgarten, may be misleading, as the figures were based on Medicare reports rather than the audited financial statements of hospitals. The numbers also focused on net income, which includes earnings from investments, rather than operating income.

"By neglecting this important distinction, his reports could lead readers to believe that the aggregated numbers reflected in his reports represent hospitals' performance with respect to revenue and expenses associated with patient care," Wendy Burt, spokeswoman for the Minnesota Hospital Association, said in the report.

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