The 41 hospitals in metro Detroit had net income of $545.6 million in 2014, or a 5.1% total margin on net patient revenue of $10.8 billion. In 2013, hospitals posted net income of $286.1 million for a 2.7% margin.
Leading the pack are the eight hospitals now part of Beaumont Health, which posted net income of $276 million, or 8.3% margin in 2014 on hospital business. Beaumont was formed in 2014 through the merger of Oakwood Healthcare and Botsford Hospital.
Coming in second place are the four hospitals part of St. John Providence Health System, which generated net income of $160.5 million. But St. John posted a higher margin at 9.1% than Beaumont's 8.3%.
Tenet Healthcare's Detroit Medical Center also generated decent profitability, making $107.9 million net income for a 2.8% profit margin.
In Southeast Michigan, Beaumont leads with a market share by revenue of 31%, followed by Henry Ford Health System at 23%, St. John at 16% and DMC at 15%.
Overall, the 41 hospitals lost $7.1 million on patient care operations in 2014. However, that was a massive improvement from 2013, when the same hospitals lost $278.1 million.
Cutting expenses, improving patient admissions and reducing uncompensated care due to Medicaid and insurance expansion from the Affordable Care Act, or Obamacare, contributed to the gains.
But the hospitals in 2014 were able to post such impressive total profits when the other revenue category is added to the bottom line. Based on the hospitals' investments, government grants and philanthropy, another $514.9 million in positive revenue was added to the balance sheets, giving the hospitals a rosy year.
Baumgarten said even with their improved results in 2014, Detroit-area hospitals were far less profitable than hospitals in the Cleveland area (average 2014 margin of 9.6%), Cincinnati (10.4%) and Columbus (13.6%).
The 42 hospitals outside Southeast Michigan also did well. They reported combined net income on $1.3 billion for an 8.2% average margin.
Four systems — Ascension Health Michigan, McLaren Healthcare, Munson Healthcare and Spectrum Health — had margins above 10%, said the report.