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Florida Health Market Review 2021

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  • February 2020
  • Region: United States
  • Allan Baumgarten
  • ID: 4969185

COVID-19 pandemic drives higher enrollment and profits for health insurers and Federal funds help Florida hospital systems to maintain profitability

Even as the COVID-19 pandemic imposed a terrible toll of illness and death in Florida, hospital systems and health insurance companies maintained their strong profitability. Enrollment in managed care plans increased, and hospital systems continued their strategies of growth through acquisitions and new construction.

These and other findings are presented in Florida Health Market Review 2021, the publisher's 16th report analyzing the financial performance and competitive strategies of Florida’s health care payer and provider organizations. Baumgarten is a Minneapolis-based analyst who publishes reports examining health market trends and competition in Florida and five other states: Colorado, Michigan, Minnesota, Ohio and Texas. He also conducts project research and has completed reports sponsored by the Robert Wood Johnson Foundation analyzing new provider-sponsored health plans and how states contract with Medicaid managed care organizations and oversee their performance.

Key findings in the new report:

  • Florida hospital systems continued their strong profitability in 2020, with hospitals in South Florida reporting net income of $1.59 billion or 9.6% of net patient revenues
  • That was less than their record profits of $2.012 billion in 2019 (11.7% of revenues) based on an analysis of data from the state’s annual survey of hospitals. Florida hospitals generally maintained strong profitability even in the face of some higher expenses and reduced revenues from surgeries that were suspended during several months of 2020. Many hospitals received millions in provider relief aid from the federal government, which made up for reduced operating income. In the Tampa-St. Petersburg region, hospitals improved their average margins from 8.8% in 2018 to 10% in 2020
  • HCA, the largest hospital system in the state with more than 40 hospitals, had net income of $2.07 billion, or 23% of patient revenues. AdventHealth, the second largest system here, had net income of $693.8 million or 9.8% of patient revenues. In South Florida, the Baptist Health system, which has acquired three hospitals in Palm Beach County, saw its net income grow from $142.8 million in 2018 to $465 million in 2019, but then drop to $246.3 million in 2020
  • Hospital systems are pursuing growth strategies including acquisitions, construction of new hospitals, outpatient centers and free-standing emergency departments, seeking to expand their geographic reach, patient count and top-line revenues
  • HCA has recently acquired or built hospitals and announced plans to build three new hospitals in the state. It also acquired the largest operator of urgent care centers in the state and plans to add new urgent care clinics. Now that the state has repealed most of its Certificate of Need rules, other systems, including academic medical centers and hospital districts, are breaking ground on new projects. Even so, systems like Tenet Health and Community Health Systems are downsizing their hospital presence in the state, selling several of their hospitals
  • Even with the new hospital construction, inpatient utilization declined in 2020 in South Florida and increased only slightly in other parts of the state
  • Inpatient hospital days at South Florida hospitals declined by 2.3% between 2018 and 2020 and the average daily occupancy rate dropped from 58.5% to 54.9%. Hospitals in the Orlando region increased their capacity by 0.5% but inpatient days grew by only 0.1%
  • Florida HMOs increased their profits by 72.9% in 2019 and by 17.1% in 2020
  • They reported net income of more than $2 billion in 2020, or 3.7% of premium revenue. The Humana HMOs had net income of $604.2 million, while the Blue Cross Blue Shield HMOs had net income of $447 million, or 6.3%, Blue Cross Blue Shield (Florida Blue) had net income of $470.7 million. In many cases, their medical expenses declined as hospitals suspended non-emergency surgeries or as patient deferred care
  • Enrollment in HMOs in the state increased by almost 9% in 2020, with increased members in Medicaid managed care. Medicare Advantage and individual plans
  • Enrollment in Medicaid plans grew by 570,000 in 2020, or 19.6%.  It continued to grow in the first three quarters of 2021, adding 467,000 more members. Medicaid HMOs had underwriting income (before investment revenues and taxes) of almost $600 million in 2020. Medicaid is a lucrative line of business for these companies and competition for the contracts will be fierce when the state launches a new procurement in the next few years. It has also become very concentrated in Florida, with the merger of WellCare and Centene (doing business as Sunshine State) creating a company with 47% of total Medicaid managed care enrollment
  • More than half of Medicare beneficiaries in the state are now enrolled in a Medicare Advantage plan
  • About 65% of them are in an HMO plan, and their enrollment and profits have grown steadily. Medicare HMOs in Florida had underwriting income of $1.164 billion in 2020, or 4.4% of premiums. Humana has the largest Medicare HMO membership, and its two HMOs had underwriting income in 2020 of $668.6 million or 6.2% of underwriting revenues.  UnitedHealthcare’s HMOs are the next largest, and Anthem has acquired four Medicare HMOs in the state since 2017 and is the third largest

Table of Contents

Market Structure
  • Health Plans
  • Provider Systems
Trend Analysis
  • Enrollment
  • Medicare HMOs
  • Medicaid Managed Care
  • Enrollment by Region
  • HMO Profitability
  • Financial Metrics
  • Provider Payments
  • Administrative Expense
  • HMO Net Worth and Capital
Hospital Systems and Regional Submarkets
  • South Florida
  • Tampa-St. Petersburg
  • Jacksonville-Gainesville
  • Orlando
A Look Ahead


The reports analyzing state health care markets are intended to be a resource to health care organizations facing a full range of challenges but also seeking to identify and benefit from opportunities that present themselves. 

This report is presented in three main sections. The first part, Market Structure, describes the major health insurers and hospital systems in the state, showing recent entrants and the high-level of consolidation that has occurred in both the health plan and provider markets. Market Trends, the next section, presents our analysis of enrollment trends and financial results for the health insurers. The last section contains our analysis of financial and inpatient utilization data on the hospitals in the state.

The analysis of health plan companies is based on their annual and quarterly statements filed with the Department of Insurance, including forms prescribed by the National Association of Insurance Commissioners and supplemental reports required by the state. The publisher also uses Medicaid data from the Department of State Health Services and Medicare health plan and hospital data from the Centers for Medicare and Medicaid Services. The publisher has that data together with insights that they have gained in interviews with dozens of leaders in health care organizations in the state.