THR’s Financial Strength Prepares Hospital System for Challenges 05/19/2005
ARLINGTON, Texas – Texas Health Resources (THR), the largest health care system in North Texas, released financial information for 2004 showing that the hospital system provided more than $75 million in charity care, $276 million in unreimbursed Medicare services, $21 million in unreimbursed Medicaid services, plus an estimated additional $21 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. For the fiscal year that ended Dec. 31, 2004, THR reported net income of $277.2 million on total revenue, gains and other support of slightly more than $2 billion.
“Texas Health Resources is fortunate to be in this financial position as we prepare for the future challenges of providing health care to the growing and aging population of North Texas,” said Doug Hawthorne, president and CEO of Texas Health Resources. “Health care in Texas faces challenges posed by a growing and aging population, an increasing number of people without health insurance, the shortage of allied health workers and the high cost of medical technology. As a faith-based nonprofit hospital system, THR reinvests our money into improving the health of the people in the communities we serve. Our shareholders are the people of our communities, and it is incumbent on us to use the communities' resources in the most prudent manner possible to meet today's needs and prepare for the future.”
THR's operating margin for 2004 was 9.9 percent, compared to 6.4 percent for 2003. The historical average operating margin for the past five years is 5.6 percent. At the end of 2004, THR had invested assets of $768 million in unrestricted cash, cash equivalents, fixed-income securities and equity securities.
“THR is a $3 billion organization in terms of assets,” said Ron Bourland, THR's executive vice president, chief financial officer and treasurer. “Bond buyers, our primary source of external capital, look to our financial liquidity as a measure of credit-worthiness. Our ability to raise money to help meet the growing health care needs of North Texans depends to a great degree on our financial strength. Our high bond rating enables THR to borrow money at a favorable rate.”
More than 50 percent of THR's gross patient service revenue in 2004 came from managed care, with 34 percent from Medicare, 5 percent from Medicaid, 7 percent from uninsured/self-pay patients and 3 percent from commercial insurance. That reflects a decrease compared to 2003 in the percentage of patient service revenue from managed care and increases from Medicare and Medicaid.
Hawthorne added, “The financial numbers for 2004 are a testament to the dedication and hard work of THR employees and the physicians on our medical staff who understand that in order to deliver quality care, THR must be financially sound. Our people continually find ways to do things more effectively and more efficiently so that more of our resources can be invested directly toward improving the health of the people in the communities we serve.”
In addition to patient care activities, THR invested $21 million in community outreach programs including, among others, such programs as:
Family Violence Prevention initiative
Free community health screenings for diabetes, heart disease and other threats
Free childhood asthma screening, education and support programs
Harris Methodist Fort Worth's Congregational Health/Parish Nurse Program
Car safety seat giveaways and child passenger safety programs
Harris Methodist HEB's Tongan Community Health Initiative
Presbyterian Hospital of Dallas Vickery Meadows Clinic
Free immunizations and physicals to enable students to participate in school activities regardless of ability to pay for health services
Women's health screening and educational programs.
THR also invested resources in 2004 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.