Two private El Paso hospitals are in the top 25 moneymakers in the nation, according to a new Forbes magazine survey. El Paso’s Del Sol Medical Center rated #2 in the nation with a whopping 45 percent profit margin, while Las Palmas Medical Center came in at #23 with a 25 percent profit margin.
Both hospitals are owned by the for-profit Tennessee hospital chain—Health Corporation of America, HCA. The chain was founded by the father of former Republican Majority leader Bill Frist who inherited a fortune from HCA.
Over the years hospitals have consolidated across the United States, driving down competition and allowing them to determine prices for insurers. How is it possible that El Paso can have two of the most profitable hospitals out of the top 25 in the nation? This is a question that requires greater scrutiny than a blog post.
I may have found a partial reason though. Two years ago, El Paso journalist David Crowder at the awesome — but now defunct Newspaper Tree, wrote about a battle between HCA and Tenet Healthcare Corporation over an exclusive contract to provide care to El Paso county employees. Prior to 2008, the county plan encouraged employees to go to HCA hospitals. This supposedly changed in 2009 with the county signing a contract to put Tenet and HCA on equal footing regarding hospitalization benefits.
It looks like HCA prevailed though. The 304 bed Del Sol Medical Center had a net patient revenue of $243 million last year, while the Las Palmas Medical Center banked $203 million.
Close scrutiny of hospitals’ profits are important because they account for a third of total health care spending — $718 billion last year, according to Forbes. And these costs keep rising every year. The figures for the report came from the American Hospital Directory, based on data that hospitals must report to the federal Medicare program each year.