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THR Reports $360 Million in Combined Charity Care, Community Benefits for 2005
06/15/2006

ARLINGTON, Texas — The largest health care system in North Texas provided more than $79 million in charity care in 2005. Texas Health Resources (THR), which released financial information for 2005, also provided more than $256 million in unreimbursed Medicare services, $13 million in unreimbursed Medicaid services, plus an estimated $17 million in community benefit programs. The charity care amount is based on the cost of services, the most conservative estimate of value to the community.

The state of Texas mandates that nonprofit hospital systems provide a combination of charity care, community benefit programming and losses in government-sponsored programs at a level at least equal to 5 percent of the system’s net patient revenue. THR has exceeded this target every year of its existence.

THR’s family of hospitals includes Arlington Memorial Hospital, Harris Methodist Hospitals and Presbyterian Healthcare System.

“THR continued its quest in 2005 to be North Texas’ health care system of choice by setting the goals for delivering safe, quality care and compassionate service to improve the health of the people in the communities we serve,” said Doug Hawthorne, president and CEO of Texas Health Resources. “Even though we are a nonprofit enterprise, we faced the same types of challenges confronting other major companies — recruiting and keeping top-notch people, providing affordable benefits to employees, managing growth to meet market demand and maintaining a solid financial foundation. As community-based hospitals, our ability to fulfill our mission depends on our financial viability.”

For the fiscal year that ended Dec. 31, 2005, THR reported net income of $260 million on total revenue, gains and other support of more than $2 billion. THR’s operating margin for 2005 was 9.4 percent, compared to 9.9 percent for 2004. The historical average operating margin for the past five years is 7.1 percent. At the end of 2005, THR had invested assets of $940 million in unrestricted cash, cash equivalents, fixed-income securities and equity securities.

More than 52 percent of THR’s gross patient service revenue in 2005 came from managed care, with 35 percent from Medicare, 4 percent from Medicaid, 7 percent from uninsured/self-pay patients and 2 percent from commercial insurance.

“THR’s business philosophy centers around our belief that we are stewards of the community’s health care assets. We operate and manage the community-based hospitals like any other sustainable business, focusing on quality care, smart business strategy, solid financial management and timely investment to meet future demand,” said Jack Roper, THR’s senior vice president of finance and interim chief financial officer. “The difference from other businesses is that instead of distributing profits to shareholders, THR reinvests revenue back into the community to improve the health of the people through programs for prevention, wellness and advanced medical care.”

Major construction projects designed to improve access to quality care are underway at Harris Methodist Southwest Hospital, Presbyterian Hospital of Dallas and Arlington Memorial Hospital.

THR also invested resources in 2005 in continuing development and deployment of information technology systems with the ultimate goal of implementing the patient electronic health record throughout the THR system.

About Texas Health Resources
Texas Health Resources is one of the largest faith-based, nonprofit health care delivery systems in the United States. The 13-hospital system is the largest in North Texas in terms of patients served and includes Harris Methodist Hospitals, Arlington Memorial Hospital and Presbyterian Healthcare System.

For more information about Texas Health Resources, visit www.texashealth.org. Financial reports from Texas Health Resources are available at www.dac-ey.com.

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