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Minnesota Health Market Review 2019, Part Two

  • ID: 5018597
  • Report
  • April 2020
  • Region: United States
  • 27 Pages
  • Allan Baumgarten
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FEATURED COMPANIES

  • Allina
  • Essentia
  • Gundersen
  • Marshfield Clinic
  • Medica Insurance Company
  • Sanford Health
  • MORE

Hospital systems serving outstate Minnesota communities increased their inpatient days in 2018 and reported a combined net income of $1.5 billion, their highest ever. Mayo Clinic’s Minnesota hospitals generated more than half of that amount, followed by Sanford Health and CentraCare.

Analyzing data from Medicare cost reports and other sources, the publisher compared financial performance and inpatient utilization for 31 Twin Cities area hospitals (including four in western Wisconsin that are part of Minnesota systems) and 51 hospitals serving communities in outstate Minnesota. This report focuses on the major integrated delivery systems in the region: Fairview, Allina, and HealthPartners in the Twin Cities and Mayo, Essentia, CentraCare, and Sanford Health in outstate Minnesota.

The new report found:

  • Hospitals serving outstate Minnesota communities improved their net income from $1.406 billion in 2017 to $1.509 billion in 2018, and their average margins grew from 8.9% in 2016 to 11.9%. The Mayo Clinic hospitals in the state increased their net income from $671.8 million in 2017 to $848.6 million in 2018. The Mayo Rochester hospitals alone had a net income of $822.6 million, or 31.8% of net patient revenues. The Sanford Health hospitals reported a net income of $222 million, while CentraCare, now including Rice Memorial hospital, had a net income of $206.8 million in 2018 or 18.1% of net patient revenues. The Essential hospitals reported a combined net income of $91.7 million, down from $131.5 million in 2017.
  • Twin Cities area hospitals reduced their operating losses and posted net income of $523.5 million in 2018, or 4.7% of net patient revenues. That was down from net income of $620.3 million (5.9% of net patient revenues) in 2017 because their other revenues from investments, philanthropy, and government grants dropped by about $170 million. Seven hospitals in the region reported margins above 10%. The Fairview Health system, including the four HealthEast hospitals, saw its net income decrease from $236.3 million to $206.4 million, while the Allina hospitals in the Twin Cities increased their net income from $204.2 million in 2017 to $220.8 million or 7.5% in 2018. The HealthPartners hospitals saw their income decrease from $129.5 million in 2017 to $76.5 million in 2018.
  • Inpatient hospital days increased in 2018 for both Twin Cities and outstate hospitals, the first significant increase since 2007. Twin Cities hospitals provided 1.513 million inpatient days, about 55,000 more than in 2017, though still less than in 2008. On average, 71.6% of beds were occupied in 2018 at metro-area hospitals. (The availability of hospital beds staffed and equipped to provided intensive care level services is an important issue during the COVID-19 pandemic.) Hospitals serving outstate communities provided about 36,000 more inpatient days in 2018. Minnesota hospitals are increasingly dependent on government payers. Medicare and Medicaid covered 68.9% of inpatient days for Twin Cities hospitals and 68.7% for outstate hospitals, which has been good for hospital revenues but also makes the hospitals vulnerable to cuts in federal programs.
  • Health systems continue to expand through acquisitions and new facilities but, before the COVID-19 pandemic began, some systems announced plans to close or downsize some facilities. Mayo Clinic is closing a hospital and clinic in Springfield, and Fairview proposed to close St. Joseph and reduce operations at Bethesda Rehabilitation, both in St. Paul. Two deals to merge large hospital systems in the region were called off in 2019: Gundersen and Marshfield Clinic in western Wisconsin canceled their plans, as did UnityPoint Health and Sanford Health.
  • Minnesota HMOs were not strongly profitable in the first six months of 2019. Medica Insurance Company, which sells individual, group, or Medicare plans in 10 states, had a  net income of $247.3 million during that period and a margin of 14.5%.
Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Allina
  • Essentia
  • Gundersen
  • Marshfield Clinic
  • Medica Insurance Company
  • Sanford Health
  • MORE
  • Introduction
  • Hospitals and Provider Systems
  • Twin Cities Area Hospitals and Systems
  • Revenues and Net Income
  • Occupancy and Payer Mix
  • Performance Bonuses and Penalties
  • Outstate Systems and Hospitals.
  • Revenues and Net Income
  • Occupancy and Payer Mix
  • Performance Bonuses and Penalties
  • Health Plan Trends
  • Enrollment by Region
  • Utilization and Effectiveness of Care and Enrollee Satisfaction
  • A Look Ahead
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  • Allina
  • CentraCare
  • Essentia
  • Fairview
  • Gundersen
  • HealthPartners
  • Marshfield Clinic
  • Mayo Clinic
  • Medica Insurance Company
  • Rice Memorial hospital
  • Sanford Health
  • UnityPoint Health
Note: Product cover images may vary from those shown
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