Ohio

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

August 21, 2018
Ohio Health Market Review 2018 
finds: 

Ohio hospitals report strong profits, especially in Columbus area;
Health insurers gain enrollees, and Medicaid plans are strongly profitable
 
      Cincinnati/Dayton/Columbus/Cleveland –Even though inpatient days declined in much of the state, Ohio hospitals continue to report strong profits, especially in the Columbus area. Ohio health plans enjoyed strong profits on their Medicaid plans in 2017, the largest line of business for HMOs.
      These are some of the key findings in Ohio Health Market Review 2018, Allan Baumgarten’s 14th report analyzing health care insurance companies and provider systems in Ohio. Based on data on health plans and hospital systems in Ohio, the report describes key trends for and analyzes their competitive strategies. Baumgarten is an independent analyst based in Minnesota who publishes market reports in Ohio (since 1997) and seven other states.
      In the new report, Baumgarten finds: 
•     Hospital profitability in 2016 and 2017 was strong in the three major metropolitan areas, and increased by 31% in the Columbus region. Based on data from Medicare hospital cost reports, the hospitals in the Columbus area had combined 2017 net income of $1.477 billion, or 16.5% of their net patient revenues. That was 31% more than their combined net income of $1.126 billion in 2016. Nationwide Children’s had net income in 2017 of $578 million, or 38.1% of net patient revenues. The OhioHealth hospitals had net income of $493.4 million (15.6%) and the Ohio State University hospitals had net income of $280 million (9.1% of revenues). Hospitals in the Cincinnati/Northern Kentucky/Dayton region had combined net income of $908.4 million in 2016 (9.1% of net patient revenues), up from $768.7 million in 2015. Cincinnati Children’s, Christ and the Kettering Health Network hospitals reported the strongest net income.
      In the Cleveland/Akron region, hospitals posted combined net income in 2016 of $982,5 million, or 7.3% of net patient revenues, down from $1.018 billion in 2015. The Cleveland Clinic hospitals had net income of $476 million (6.9% of revenues), while the University Hospitals system had net income of $366.4 million (11.3% of net patient revenues).
•     Inpatient days decreased again for hospitals in the Cincinnati and Cleveland areas, but increased in the Columbus area. Inpatient days fell by 3.5% in 2016 in the Cincinnati region and by 2.7% for Cleveland/Akron area hospitals. Ohio hospitals continue to pursue growth strategies, including significant capital investments in new facilities, both inpatient and ambulatory centers, focusing on areas of population growth, where household income is above average and where many households have good employer group coverage. For example, travelers on Interstate 75 between Dayton and Cincinnati will see new hospitals and medical centers, including freestanding emergency departments, for each of the major systems.
•     Growth in Medicaid and individual enrollment has brought total membership for Ohio HMOs to over 3.2 million, the highest ever. HMO enrollment has grown every year since 2012, and surged in 2014 after Ohio expanded Medicaid eligibility and large numbers of individuals bought subsidized health plans. At the end of 2017, 2.46 million Medicaid recipients were in HMO plans compared to 1.7 million in 2013. Between 2013 and 2017, enrollment in HMO and PPO plans for individuals grew from 249,000 to 283,000.
•     After posting a combined net loss in 2016, Ohio HMOs reported 2017 net income of $316 million, or 1.6% of underwriting revenues. The state’s six Medicaid health plans posted combined underwriting income of $440 million in 2017, or 2.4% of revenues.Of the Medicaid HMOs, UnitedHealthcare Community Plan had the strongest margin in 2017 (5.0%), followed by Molina Healthcare (3.7%) and Buckeye Community (3.4%). CareSource, the largest health insurer in the state, mad $91.4 million on its Medicaid plans, but lost $73.7 million on its Medicare plans and $19.6 million on its individual plans.
      In 2017, Anthem Blue Cross Blue Shield had after-tax net income of $382.3 million, or 4.3% of revenues, compared to $319.1 million in 2015. Medical Mutual had net income of $22.4 million, less than in 2016.
      Excerpts from Ohio Health Market Review 2018, including the popular “Ohio HMOs at a Glance” exhibit can be viewed at https://www.allanbaumgarten.com/ohio.php Copies of the reportpublished in interactive PDF format, can be ordered for $160.00 at the website or by calling Baumgarten at 952-925-9121, Fax: 952-925-9341, E-mail: Baumg010@tc.umn.edu

January 14, 2016

Ohio Health Market Review 2015 finds: 
Consolidated hospital systems pursue expanded networks, 
maintain profits even with fewer inpatient days; 
Medicaid and individual enrollment in HMOs surges and Medicaid is strongly profitable

             Cincinnati/Columbus/Cleveland –Ohio hospital systems continue to expand through mergers, acquisitions and new construction and there are now five systems in the state with 2014 revenues above $2.5 billion. Their profits are strong, even though inpatient days continue to decline in Cincinnati and Cleveland. Ohio health insurers have added about 800,000 Medicaid recipients and individual insureds, and but their overall profits declined in 2013 and 2014.
            These and other findings are presented in Ohio Health Market Review 2015, Allan Baumgarten’s 13th report analyzing health care insurance and provider markets in Ohio. The report examines data on health plans and hospital systems in Ohio, putting that analysis in the context of provider system consolidation and implementation of the Affordable Care Act. Baumgarten, an independent analyst based in Minnesota, has published his Ohio market analysis since 1997. He has also published market studies in 11 other key states.
            In the new report, Baumgarten finds: 
•            Hospital profitability in the three largest metropolitan areas improved sharply in 2013 and 2014. Using data from Medicare hospital cost reports, the report shows Cincinnati area hospitals had combined net income of $645.1 million in 2014, or 10.4% of net patient revenues. Christ Hospital and the Tri-Health and the St. Elizabeth systems had the strongest margins. By comparison, the average margin was 8.5% in 2012. Cleveland-area hospitals had especially strong margins in 2013, averaging 12.2%, but that dropped to 9.6% in 2014, or net income of $978.9 million. Still that was higher than 2012 net income of $852.9 million, or 9.1% of net patient revenues. Comparing the three metropolitan areas, Columbus hospitals reported the strongest margins in 2014. They had net income of $992 million, or 13.6% of patient revenues. That is up from $776 million (12.4%) in 2012. Nationwide Children’s had a margin of 26% in 2014, and the other systems all posted strong results.
•            Although their profitability is strong, inpatient days dropped again for hospitals in the Cincinnati and Cleveland areas. Ohio hospitals continue to make significant capital investments in new facilities, even though inpatient days have dropped for many of them in recent years. For example, inpatient days for Cleveland hospitals dropped by about 1% in 2014, and the average inpatient occupancy rate has dropped from 69.6% in 2008 to 64.7% in 2014. (The decline was less steep in Cincinnati: from 68.7% to 67.4% in 2014.)
•            Medicaid and individual enrollment has grown sharply in the past 18 months. Enrollment in Medicaid HMOs reached 2.4 million in 2014, though it dropped slightly in the first half of 2015. That growth includes over 500,000 recipients added under the eligibility expansion of the Affordable Care Act, which the Kasich administration implemented over legislative opposition. In addition, the state has begun extending managed care to aged and disabled recipients. Enrollment in individual HMO plans grew by almost 100,000 in 2014 and continues to grow. New entrants like CareSource and Ambetter/Buckeye as well as Medical Mutual’s HMO have added the most new members.
•            Although enrollment has grown, HMO profitability declined in 2013 and 2014. Ohio HMOs had net income of $171.2 million in 2014, or 1.1% of premium revenues. That is less than their margin of 2.0% in 2013 and 2.5% of underwriting revenues in 2012. While HMOs lost money on their commercial plans, Medicaid was the most profitable line of business in 2014, with CareSource, Molina Healthcare and UnitedHealthcare all posting very strong profits. CareSource, the largest HMO in the state, had underwriting income of $108.3 million for Medicaid. UnitedHealthcare had underwriting income of $31.3 million for Medicare, but several of the other Medicare plans lost money in 2014. Anthem Blue Cross Blue Shield had 2014 net income of $$276.9 million, for a margin of 5.2%. That was less than 7.3% in 2012. Medical Mutual had a margin of 4.3% in 2014.
 
            Excerpts from Ohio Health Market Review 2015, including the popular “Ohio HMOs at a Glance” exhibit can be viewed at https://www.allanbaumgarten.com/ohio.php Copies of the reportpublished in interactive PDF format, can be ordered for $160.00 at the website or by calling Baumgarten at 952-925-9121, Fax: 952-925-9341, E-mail: Baumg010@tc.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

HMO Enrollment ......................................................................................................................... 11

Medicare Plans............................................................................................................................. 14

Medicaid Managed Care .............................................................................................................. 15

Net Income ................................................................................................................................... 17

HMO Financials by Line of Business  .......................................................................................... 19

Provider Payments and Administrative Expenses ....................................................................... 22

Health Plan Capital and Surplus ................................................................................................. 23

Hospital Systems and Regional Submarkets  ............................................................................ 25

Cincinnati-Northern Kentucky- Dayton .................................................................................... 27

Cleveland-Akron  ........................................................................................................................ 30

Columbus ................................................................................................................................... 34

Other Major Hospitals................................................................................................................ 40

A Look Ahead.............................................................................................................................. 45

Media Coverage/Presentations

Ohio Health Market Review 2018  released August 21:  "Ohio hospital report strong profits, especially in Columbus area; health insurers gain enrollees and Medicaid plans are strongly profitable"

  • Barrett Brunsman wrote in the Cincinnati Business Courier: "Income surges for Great Cincinnati hospitals." Click here to read
  • Anna Saker wrote in the Cincinnati Enquirer: "Fewer people in Cincinnati hospitals for 2016, yet revenues role 18%, study shows." Click here to read

Ohio Health Market Review 2015  released January 14:  "Consolidated hospital systems pursue expanded networks, maintain profits even with fewer inpatient days; highly profitable Medicaid enrollment surges"