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Twin City hospital profits healthy, survey says

Pioneer Press, May 16, 2011

Minnesota's nonprofit health insurers posted a combined profit on operations during 2010 of about $293 million, according to the Minnesota Council of Health Plans. But a Pioneer Press analysis finds that just the hospital systems based in five large metro counties collectively earned even more money during 2010 - about $361 million in operating profit. Hospital officials say the profits aren't excessive considering the investments medical centers must make in their facilities, equipment and employees. Numbers aren't yet available for all hospitals in 2010, but the Minnesota Hospital Association says hospitals collectively earned $747.7 million on operations in 2009 for an average profit margin of 5.2%.That means medical centers as a group earned about 5 cents for every dollar of operating revenue. "These are very capital-intensive facilities," said Lawrence Massa, president of the hospital association. "They have to have margins and capital to plow back into the operations and infrastructure....We continually upgrade equipment and provide new services as the technology changes."