Income for two large Catholic health systems soared in 2004. Catholic Health East and SSM Health Care enjoyed a respective 78% and 83% boost to net income last year, according to recently released financial statements.
Financial results for the Newton Square, Pa.-based Catholic Health East and St. Louis-based SSM were unavailable in April, when Modern Healthcare surveyed the revenue, incomes and charity-care expenses of the nation's largest Catholic systems after the death of Pope John Paul II (April, 11, p. 6). The pair's improved finances mirror general gains among not-for-profit hospitals and the strong 2004 returns previously reported by Ascension Health, St. Louis; Catholic Health Initiatives, Denver; and Catholic Healthcare West, San Francisco.
Catholic Health East saw revenue increased to $4.1 billion in 2004, up 6.3% from a year earlier, according to audited financial statements. Its net income jumped 78% to $205.1 million. But Catholic Health East reported its cost of care for patients who cannot afford to pay, or charity care, fell 17% in 2004. The Catholic system spent an estimated $60.7 million on charity care in 2004, down 17.4% from 2003.
Sal Foti, a spokesman for the system, attributed its $12.8 million decline in charity care to accounting changes. Money once reported as charity care now falls elsewhere in its tally of community benefits, Foti said. Charity care does not include expenses from patients who don't pay, or bad debt; unpaid costs for patients in Medicare, Medicaid or other public programs; or community-benefit programs. Differences in charity-care calculations are not uncommon. The type of numbers used for Catholic Healthcare Partners, Cincinnati, in the April 11 story varied from the others (See p. 22).
Foti noted that Catholic Health East's spending on unreimbursed care or community benefits rose overall to $331 million in 2004 from $319.7 million in 2003. CHE's improved financials earned a bond rating upgrade to A1 from A2 on $1.4 billion in debt from Moody's Investors Service, New York, last week.
SSM saw revenue rise 7% to $2.1 billion, according to audited financial statements. Its net income increased by 83% to $130.6 million. That gave the system a healthy 6.1% net margin for 2004, despite a dip in operating income after an appraisal of certain SSM nursing homes and medical office buildings that required a $5.6 million write-down, SSM spokeswoman Patricia Klein said in an e-mail.
SSM's estimated cost of care for patients unable to pay rose 47.8% to $23.8 million from $16.1 million a year earlier.