Illinois

Reports
HMOs at a Glance
Data Set Summary
State Links
Report Contents
Media Coverage/Presentations
Reports

August 26, 2016
 
Illinois Health Market Review 2016 finds:
Health Plan Enrollment Surges, But Profits Decline
Hospital Systems Pursue Growth Strategies, But Profits Decline by 42%
 
Chicago –Enrollment surged in Illinois health plans in 2015 but their profitability dropped sharply. Chicago-area hospital systems continue to seek growth through new facilities, mergers and partnerships. They enjoyed strong profits in 2015 but less than in 2014 and their inpatient days continued to fall. 
 
These findings and others reported in Illinois Health Market Review 2016, Allan Baumgarten's 13th annual report analyzing trends in Illinois health care markets and organizations. Baumgarten, an independent analyst of health care finance and policy, publishes market studies in Illinois and seven other states: Colorado, Florida, Michigan, Minnesota, Ohio, Texas and Wisconsin.  Sidebars in the new Illinois report compare Illinois HMOs to their counterparts in other states. 
 
Baumgarten’s new report finds:
 
•           Average profit margins for about 80 Chicago area hospitals fell from 9.3% in 2014 to 6.2% in 2015. Based on an analysis of Medicare facility cost reports for 2014 and 2015, net income for Chicago area hospitals dropped by almost $590 million or 27% – from $2.132 billion in 2014 to $1.544 billion in 2015. The Northwestern Memorial hospitals, now the second largest system in the region, had the strongest margin, at 15%; Advocate Health, the largest system in the state, had net income of $386 million, or 9.7% of net patient revenues.
 
•           Inpatient hospital utilization has declined every year but one since 2008. The number of inpatient days at Chicago area hospitals dropped by 0.2% in 2015, and has fallen by 5.0% in the past five years. Hospitals have closed but new hospitals have opened, leaving overall capacity largely unchanged. The percentage of beds filled on an average day has fallen from 67% in 2010 to 64.1% in 2015.
 
•           Hospital systems continue to pursue growth strategies, through new construction, mergers, strategic partnerships and opening convenient care locations. Both in the Chicago area and other parts of the state, hospital systems are investing in facilities to strengthen their presence in developing areas, especially those with higher household income and better insurance coverage.
 
•           Health plan enrollment grew sharply in 2014 and 2015, as almost 1.3 million Medicaid recipients moved into HMO plans. Since the state began expanding Medicaid eligibility in 2014, it has added more than 600,000 new recipients. Combined with the state’s latest managed care initiatives, Medicaid enrollment in HMOs grew to 1.5 million in 2015 and higher in the first half of 2016. Meridian Health is now the largest Medicaid health plans, followed by Blue Cross Blue Shield of Illinois. Enrollment in individual and Medicare plans has also grown.
 
•           Even as enrollment and revenues increased, profits for Illinois health plans in 2015 fell by more than half a billion dollars. Illinois health plans lost $104.2 million in 2015, about 1% of revenues, after reporting 2014 profits of $407.9 million, or 5.7% of revenues. Profits for HMO Illinois (owned by Blue Cross Blue Shield) dropped by more than $400 million; it posted a loss of $12.4 million in 2015. Most of the Medicaid HMOs reported large losses, including IlliniCare and Aetna Better HealthLand of Lincoln Mutual, one of the cooperatives formed under the Affordable Care Act, lost $90.8 million in 2015.
 
Excerpts from the report, including the "Illinois Health Plans at a Glance" exhibit can be viewed in the State Reports section of https://allanbaumgarten.com. A subscription to Illinois Health Market Review 2016 can be ordered online at https://allanbaumgarten.com/  Or call 952/925-9121 or fax 952/925-9341. E-mail address: Baumg010@umn.edu

HMOs at a Glance
Data Set Summary
Report Contents

Introduction..............................................................................................................................  . 3

Market Structure ......................................................................................................................  4

Health Plans .............................................................................................................................  4

Provider Systems ...................................................................................................................... . 7

Trend Review . ............................................................................................................................ 11

Health Plan Enrollment .............................................................................................................. 12

Medicaid...................................................................................................................................... 13

Medicare Senior Plans . .............................................................................................................. 15

Health Plan Net Income .............................................................................................................  17

Health Plan Finances by Line of Business................................................................................... 19

Provider Payment ........................................................................................................................ 23

Administrative Expenses ............................................................................................................ 24

Health Plan Capital ....................................................................................................................  24

Hospitals and Health Systems . .................................................................................................. 26

Chicago Area Hospitals .............................................................................................................. 27

Other Major Hospitals ...............................................................................................................  38

A Look Ahead . ............................................................................................................................ 42

Media Coverage/Presentations

lllinois Health Market Review 2016 released August  25, 2016: "Health Plan Enrollment Surges, But Profits Decline; Hospital Systems Pursue Growth Strategies, But Profits Decrease by 39%"


​lllinois Health Market Review 2012 released December 5, 2012: "Health insurers and hospital enjoy strong profits; inpatient hospital days decline for fourth straight year."

  • Crain's Chicago Business reported: "Hospitals Still Investing in Facilities Despite Falling Admissions"
  • Peter Frost wrote in the Chicago Tribune: "No-Wait Emergency Rooms?" Hospitals try to attract new patients while dealing with continued decrease in inpatient visits