Top Georgia Hospitals by Revenue

Posted on by Karen Braddy 5 mins read

When you look at financial statements for most businesses, revenue is meaningful. The company made x number of products and sold them. Revenue is up year over year. This company must be doing well. Well, welcome to healthcare. Specifically, hospitals. In this industry revenue is not as meaningful. Well, it’s meaningful, but net revenue is more interesting.

Net revenue is simply revenue minus contractuals and discounts. With hospitals, they have a charge structure for services. Then enters insurance contracts and the charge structure doesn’t really mean as much.

Here’s how it goes. Patient comes to hospital and racks up a bill for $30,000 for an outpatient surgical procedure. Bill is sent to insurance. Insurance pays $1,500. So, revenue for this procedure is $30,000, but net revenue is $1,500. In this case, the hospital is only going to receive $1,500, so the revenue of $30,000 is not as meaningful.

Revenue

Let’s take a look at the top fifteen hospitals by revenue.

# Hospital City Year-End Revenue
1 NORTHSIDE HOSPITAL ATLANTA 09/30/2018 7,633,721,198
2 NORTHEAST GEORGIA MEDICAL CENTER GAINESVILLE 09/30/2018 4,939,291,111
3 GRADY MEMORIAL HOSPITAL ATLANTA 12/31/2017 4,704,878,430
4 KENNESTONE HOSPITAL MARIETTA 06/30/2018 4,383,443,740
5 PIEDMONT HOSPITAL INC. ATLANTA 06/30/2018 3,900,044,534
6 EMORY UNIVERSITY HOSPITAL ATLANTA 08/31/2018 2,800,444,700
7 GWINNETT HOSPITAL SYSTEM INC LAWRENCEVILLE 06/30/2018 2,786,229,460
8 DOCTORS HOSPITAL OF AUGUSTA AUGUSTA 03/31/2018 2,599,142,587
9 EMORY UNIVERSITY HOSPITAL MIDTOWN ATLANTA 08/31/2018 2,569,620,625
10 MEDICAL CENTER OF CENTRAL GEORGIA MACON 09/30/2017 2,478,046,121
11 AU MEDICAL CENTER INC AUGUSTA 06/30/2018 2,461,613,123
12 ATLANTA MEDICAL CENTER ATLANTA 06/30/2018 2,269,582,401
13 NORTHSIDE HOSPITAL FORSYTH CUMMING 09/30/2018 2,203,713,105
14 COBB HOSPITAL AND MEDICAL CENTER AUSTELL 06/30/2018 1,997,279,727
15 MEMORIAL HEALTH UNIV MED CENTER SAVANNAH 01/31/2018 1,956,184,617

Northside Hospital generated the most revenue at $7.6B. That’s a lot of revenue. But after contractuals and discounts, their net revenue is $2B. Not too shabby, but not anywhere close to the initial $7.6B.

Net Revenue

Let’s see what happens when we order the list above by net revenue instead of revenue.

# Hospital City Year-End Revenue Net Revenue
1 NORTHSIDE HOSPITAL ATLANTA 09/30/2018 7,633,721,198 2,081,577,841
2 NORTHEAST GEORGIA MEDICAL CENTER GAINESVILLE 09/30/2018 4,939,291,111 1,266,568,544
3 KENNESTONE HOSPITAL MARIETTA 06/30/2018 4,383,443,740 1,063,317,184
4 EMORY UNIVERSITY HOSPITAL ATLANTA 08/31/2018 2,800,444,700 1,026,464,204
5 PIEDMONT HOSPITAL INC. ATLANTA 06/30/2018 3,900,044,534 946,187,728
6 EMORY UNIVERSITY HOSPITAL MIDTOWN ATLANTA 08/31/2018 2,569,620,625 892,680,230
7 GRADY MEMORIAL HOSPITAL ATLANTA 12/31/2017 4,704,878,430 848,097,164
8 GWINNETT HOSPITAL SYSTEM INC LAWRENCEVILLE 06/30/2018 2,786,229,460 715,193,298
9 MEDICAL CENTER OF CENTRAL GEORGIA MACON 09/30/2017 2,478,046,121 669,902,423
10 AU MEDICAL CENTER INC AUGUSTA 06/30/2018 2,461,613,123 653,750,204
11 MEMORIAL HEALTH UNIV MED CENTER SAVANNAH 01/31/2018 1,956,184,617 528,261,223
12 NORTHSIDE HOSPITAL FORSYTH CUMMING 09/30/2018 2,203,713,105 508,201,474
13 COBB HOSPITAL AND MEDICAL CENTER AUSTELL 06/30/2018 1,997,279,727 441,262,643
14 DOCTORS HOSPITAL OF AUGUSTA AUGUSTA 03/31/2018 2,599,142,587 406,504,563
15 ATLANTA MEDICAL CENTER ATLANTA 06/30/2018 2,269,582,401 341,704,453

The first two hospitals have stayed in the same place, but Grady has dropped from third to seventh.

Let’s take a look at what percentage is net revenue as compared to revenue. Basically, what percent of revenue remains.

# Hospital Revenue Net Revenue Net Rev/Rev
1 NORTHSIDE HOSPITAL 7,633,721,198 2,081,577,841 27%
2 NORTHEAST GEORGIA MEDICAL CENTER 4,939,291,111 1,266,568,544 26%
3 KENNESTONE HOSPITAL 4,383,443,740 1,063,317,184 24%
4 EMORY UNIVERSITY HOSPITAL 2,800,444,700 1,026,464,204 37%
5 PIEDMONT HOSPITAL INC. 3,900,044,534 946,187,728 24%
6 EMORY UNIVERSITY HOSPITAL MIDTOWN 2,569,620,625 892,680,230 35%
7 GRADY MEMORIAL HOSPITAL 4,704,878,430 848,097,164 18%
8 GWINNETT HOSPITAL SYSTEM INC 2,786,229,460 715,193,298 26%
9 MEDICAL CENTER OF CENTRAL GEORGIA 2,478,046,121 669,902,423 27%
10 AU MEDICAL CENTER INC 2,461,613,123 653,750,204 27%
11 MEMORIAL HEALTH UNIV MED CENTER 1,956,184,617 528,261,223 27%
12 NORTHSIDE HOSPITAL FORSYTH 2,203,713,105 508,201,474 23%
13 COBB HOSPITAL AND MEDICAL CENTER 1,997,279,727 441,262,643 22%
14 DOCTORS HOSPITAL OF AUGUSTA 2,599,142,587 406,504,563 16%
15 ATLANTA MEDICAL CENTER 2,269,582,401 341,704,453 15%

Wow! The average is 25%. That means, on average, revenue is netted down 75% by contractuals and discounts given the patients. That’s crazy! Imagine sending a bill to a client for $100 and they turn around and send you $25. The hospital agreed to provide that service for $25; that’s what the contract says. Man, that’s huge difference, though.

Net Patient Income

Revenue is what the hospital charges. Net revenue is what they expect to receive from the insurance company and/or patient. Expenses is what it costs the hospital to operate (nurses, electricity, supplies, etc). What’s leftover, is net income. In this case, we are only looking at net income from services to patients. The hospital can make money selling you a copy of your medical records or charging you to park. That is considered “Other Income” and is not included in these figures.

Let’s sort the list one last time based on net patient income and see where the hospitals fall.

# Hospital City Year-End Revenue Net Patient Income
1 KENNESTONE HOSPITAL MARIETTA 06/30/2018 4,383,443,740 203,753,716
2 DOCTORS HOSPITAL OF AUGUSTA AUGUSTA 03/31/2018 2,599,142,587 119,951,619
3 EMORY UNIVERSITY HOSPITAL ATLANTA 08/31/2018 2,800,444,700 103,749,106
4 NORTHSIDE HOSPITAL FORSYTH CUMMING 09/30/2018 2,203,713,105 32,082,468
5 PIEDMONT HOSPITAL INC. ATLANTA 06/30/2018 3,900,044,534 29,827,194
6 EMORY UNIVERSITY HOSPITAL MIDTOWN ATLANTA 08/31/2018 2,569,620,625 23,897,186
7 COBB HOSPITAL AND MEDICAL CENTER AUSTELL 06/30/2018 1,997,279,727 19,313,611
8 NORTHEAST GEORGIA MEDICAL CENTER GAINESVILLE 09/30/2018 4,939,291,111 5,683,341
9 ATLANTA MEDICAL CENTER ATLANTA 06/30/2018 2,269,582,401 -4,674,593
10 GWINNETT HOSPITAL SYSTEM INC LAWRENCEVILLE 06/30/2018 2,786,229,460 -5,970,622
11 NORTHSIDE HOSPITAL ATLANTA 09/30/2018 7,633,721,198 -26,898,679
12 MEMORIAL HEALTH UNIV MED CENTER SAVANNAH 01/31/2018 1,956,184,617 -41,069,910
13 MEDICAL CENTER OF CENTRAL GEORGIA MACON 09/30/2017 2,478,046,121 -47,369,171
14 AU MEDICAL CENTER INC AUGUSTA 06/30/2018 2,461,613,123 -107,860,722
15 GRADY MEMORIAL HOSPITAL ATLANTA 12/31/2017 4,704,878,430 -239,026,996

Northside has dropped from first in revenue to eleventh in net income. Northeast Georgia Medical System has dropped from second to eighth. And Grady has dropped from third to last.

For these hospitals with negative net income in the Medicare cost report period we are looking at, it cost the hospital more to care for the patients than they received in income. This does not mean that the hospital’s overall net income is negative. They may have other non-patient income that covers the patient income short fall.

Musing Revelation

I have known for a while that net revenue is significantly less than revenue; that contractuals are a huge reduction to revenue. I was thinking 50%. I was not thinking 75%. That’s crazy. No wonder so many hospitals struggle to survive.