North Carolina’s seven largest hospital systems reported about $160 billion in revenue and $14.5 billion in profit over the past six years, according to a report by N.C. State Treasurer Dale Folwell.
Profit was particularly strong in 2021 for the not-for-profit systems, which were buoyed by federal support related to the COVID-19 pandemic and strong investment returns. Hospitals make money through operations and from their portfolios of stocks and bonds.
While Folwell criticized the profits as excessive, the systems said strong financials are necessary to meet unprecedented challenges of the pandemic. Hospitals nationally struggled to retain and recruit nurses and other front-line workers. This year’s stock market slump is likely to depress hospital system profits.
The report, which is a first for N.C. state government, showed that the four largest systems operate more profitably and benefit from bigger balance sheets than their three smaller peers.
Durham-based Duke Health was the most profitable system with an average net income margin of 17.6% over the past five years. (It did not provide data for 2016.) Its flagship medical center in Durham often ranks among the nation’s 20 top hospitals.
By comparison, Greenville-based Vidant Health reported an average net income margin of 5.3% and average operating margin of 2.5% over the past six years.
Folwell says the report supports his view that not-for-profit hospital systems should provide more charity care and reduce prices. The State Health Plan, which Folwell oversees, is the biggest purchaser of medical care in North Carolina.
The report noted that HCA Healthcare, a Nashville, Tennessee-based for-profit system that owns western North Carolina’s main hospital in Asheville, returned $6 billion in federal pandemic relief funds in 2020. HCA said it “was the socially responsible thing to do.” The other big N.C. systems didn’t return funds.
HCA declined to disclose its North Carolina finances to Folwell.■
N.C. HOSPITAL FINANCIALS
Atrium Health
Operating revenue 2016-21
$46.7 billion
Net income (2016-21): $4.6 billion
Average net profit margin: 9.3%
Average operating profit margin: 3.5%
Total cash & investments, 2021: $12.5 billion
Novant Health
Operating revenue 2016-21
$32.4 billion
Net income (2016-21): $2.7 billion
Average net profit margin: 8.3%
Average operating profit margin 4.3%
Total cash & investments, 2021: $4.7 billion
UNC Health
Operating revenue 2016-21
$25 billion
Net income (2016-21): $2.3 billion
Average net profit margin: 9%
Average operating profit margin: 4.7%
Total cash & investments, 2021: $2.7 billion
Duke Health
Operating revenue* 2017-21
$19 billion
Net income (2017-21): $3.5 billion
Average net profit margin: 17.6%
Average operating profit margin: 5.8%
Total cash & investments, 2021: $5.7 billion
* 2016 was not included
Vidant Health
Operating revenue 2016-21
$11.2 billion
Net income (2016-21): $600 million
Average net profit margin, 2017-2021: 5.3%
Average operating profit margin: 2.5%
Total cash & investments, 2021: $1.16 billion
Cone Health
Operating revenue* 2017-21
$10.8 billion
Net income (2017-21): $492 million
Average net profit margin: 4.5%
Average operating profit margin: 2.6%
Total cash & investments, 2021: $1.6 billion
* 2016 was not included
WakeMed Health
Operating revenue 2016-21
$8.3 billion
Net income (2016-21): $430 million
Average net profit margin: 5.2%
Average operating profit margin: 2.7%
Total cash & investments, 2021: $1.1 billion
