The business of health care is getting a lot harder on providers. Profit margins of Chicago area hospitals declined significantly in 2015, with a handful of health care systems losing money from operations. Meantime, health insurance plans in Illinois swung to a loss last year, dragged under by Blue Cross Blue Shield of Illinois and Land of Lincoln.The great moments of cartelized medicine.
These are among the findings of a comprehensive report of the state's health care marketplace to be released generally later this week.
At the 82 hospitals in metro Chicago, average margins fell to 5.2 percent of revenue in 2015 from 9.3 percent in 2014, according to Illinois Health Market Review 2016, published by Allan Baumgarten, an independent analyst in Minneapolis. Thanks to philanthropy and government grants, the industry still made money.
Illinois health plans weren't even that fortunate. Collectively, they lost $104.2 million in 2015, 1 percent of revenue, compared to a profit of $407.9 million, or 5.7 percent of revenue in 2014. HMO Illinois, an insurance plan of Blue Cross Blue Shield of Illinois, lost $12.4 million in 2015, a decline of more than $400 million year over year. Land of Lincoln, an Obamacare co-op that recently shut down, lost $90.8 million.
“As Blue Cross goes, so goes the industry,” Baumgarten said in an interview.
Wednesday, August 24, 2016
Crain's Chicago Business reports:
Posted by Steve Bartin at 8:25 AM