Even once safe bets are getting hit by the economy.
The county’s 32 largest hospitals,usually bastions of stability in good times or bad,saw an 84% drop in pretax income to $58.6 million for the 12 months ended Sept. 30, according to the Business Journal’s annual list of the largest local hospitals.
The list ranks hospitals by revenue, which was up 7% to $5.6 billion for the 12 months through September.
No. 1 Hoag Memorial Hospital Presbyterian reflected the trend on the list.
The Newport Beach hospital swung to a pretax loss of $77.4 million, versus a pretax profit of $135.4 million a year earlier.
Hoag’s revenue was up 8% to $619 million.
“The impact of the external economic environment and related capital investment decisions” offset a $37.1 million operating profit for the period, Hoag officials said in a statement.
Investment losses related to Wall Street’s fall meltdown totaled some $81.9 million, according to Hoag.
Hospitals usually aren’t hit hard by recessions. But the extent of this one is different.
Local hospitals are treating more uninsured patients who’ve lost health coverage when they were laid off. At the same time, they’re seeing fewer people opt for outpatient elective procedures, which are among the most profitable for hospitals.
And, like everyone else, hospitals have seen cash they invested in Wall Street decline with last year’s 40% drop in the market.
Silver Lining
Still, more than half of the hospitals, 18, were profitable through September. Eleven reported higher pretax income for the period. Six reported losses versus a profit a year earlier. Seven saw a second year of losses.
Twenty-three hospitals saw higher revenue. Six posted declines. Two were flat. One is a Business Journal estimate.
Revenue and pretax income figures came from California’s Office of Statewide Hospital Planning and Development.
No. 3 St. Joseph Hospital-Orange swung to a $7.9 million loss, versus a $21 million profit a year earlier.
No. 4 St. Jude Medical Center swung to a $3.3 million loss from a $71.6 million profit a year earlier.
Both are part of Orange-based St. Joseph Health System, the hospital operator that also oversees No. 5 Mission Hospital in Mission Viejo. Mission’s pretax profit was $10.3 million, down 67%.
“The economy continues to affect for-profit and not-for-profit organizations all across our country,” said Darrin Montalvo, chief financial officer of St. Joseph Health System. “Our hospitals have also felt the economic downturn, which has affected our investment portfolio to varying degrees at each of our hospitals.”
No. 2 UCI Medical Center, a teaching hospital that lost the list’s top spot in 2007, saw a 7% rise in revenue to $534.6 million. UCI’s pretax profit rose 7% to $59.6 million.
No. 6 Saddleback Memorial Medical Center posted a 6% patient revenue jump to $328 million. Saddleback saw its net income jump 93% to $24.3 million.
Memorial Health Services, based in Fountain Valley, owns Saddleback and several other hospitals on the list, including No. 10 Orange Coast Memorial Medical Center in Fountain Valley.
Orange Coast had a 5% revenue gain to $194.4 million. Its net income was down 11% to $11.3 million.
At No. 11 was Anaheim Memorial Medical Center, which Memorial has been trying to sell. The hospital’s net patient revenue was flat at $184.5 million. Its pretax income fell 45% to $2.6 million.
Memorial had planned to sell the hospital to Integrated Healthcare Holdings Inc. of Santa Ana until a deal fell through in early 2008.
It then had a proposed deal to sell Anaheim Memorial to Pacific Health Corp., a Tustin-based hospital operator. That deal collapsed in August when Attorney General Jerry Brown’s office blocked it. Pacific was facing allegations that it defrauded Medicare and Medi-Cal.
Children’s Hospital of Orange County retained its No. 7 ranking. CHOC’s net patient revenue grew 12% to $327.1 million. Its net income dropped,it was down 50% to $4.3 million.
Fountain Valley Regional Hospital and Medical Center also maintained its position on the list, coming in at No. 8 with $252.1 million in revenue, a 10% increase from a year earlier, and $8.6 million in pre-tax net income, a 45% increase.
The list includes one hospital that now is closed,Irvine Regional Hospital and Medical Center, No. 14 on the list. Hoag took over the lease for the hospital from Tenet Healthcare Corp. last summer and is renovating Irvine Regional with plans to reopen it next year.
The number of OC licensed beds jumped 3% to 6,688 in 2008. Employment was up 6% to 41,000 workers.
