Investment losses again impact nonprofit hospitals' bottom lines

In late 2009 and early 2010, not-for-profit hospitals seemed to enjoy a brief reprieve from the heavy investment losses they suffered throughout the recession. But no more: At least three hospital systems across the country suffered Wall Street-fueled losses from their investment portfolios and interest-rate swaps for the quarter ended June 30.

Baptist Health South Florida. This Miami-based not-for-profit health system had net income of $27.5 million for third-quarter 2010 (3Q10) ended June 30. That compares to net income of $120 million for last year's third quarter. Baptist Health attributed the precipitous drop to investment losses, reports the South Florida Business Journal. The six-hospital health system took a $53.6 million investment loss in 3Q10 vs. a $92.8 million gain in 3Q09. Income from operations actually increased to $83.3 million in 3Q10 from $29.7 million in 3Q09.

All Children's Hospital. This St. Petersburg, Fla.-based nonprofit, which is part of the billion-dollar All Children's Health System, posted a non-operating loss of $18.8 million for the quarter ended June 30 vs. a $26 million non-operating gain in the year-ago period, reports the Tampa Bay Business Journal. All Children's cited unrealized investment losses and a reduced value for interest-rate swap agreements as reasons for the loss. The hospital also reported income from operations of $821,553, down from $4.8 million in the year-ago quarter due to expenses related to its new 259-bed replacement facility. Last month, All Children's signed an integration letter of intent to join Baltimore-based Johns Hopkins Medicine. That deal is expected to close late this year.

Partners HealthCare System. This Boston-based nonprofit health system posted a $61 million non-operating loss for 3Q10, reports the Boston Globe. Partners attributed the loss to both stock price declines and the reduced value of fixed interest-rate swaps. The system had $56 million in 3Q10 operating income, but the non-operating loss resulted in an overall loss of $5 million compared to an overall gain of $133.4 million in the year-ago quarter.

To learn more:
- read this South Florida Business Journal article
- read this Tampa Bay Business Journal article
- read this All Children's press release
- read this Boston Globe article