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Greater Minnesota health-system hospitals hit 10.8% profit margin

This is just SO surprising … Minnesota hospitals are doing well financially. The PiPress story, by Christopher Snowbeck, says: “Over the past decade, a growing number of hospitals in greater Minnesota have consolidated into larger health systems. Now, a new report shows that those medical centers are doing very well financially. During 2010, hospitals in the Twin Cities reported net income of $450.9 million, a profit of 5.9 cents per dollar of net-patient revenue, according to a report being released Friday ... by Allan Baumgarten, an independent health care analyst in St. Louis Park. But for a subset of hospitals in greater Minnesota, the financial returns in 2010 were even stronger. Hospitals affiliated with six large health systems as well as a few other strong medical centers in greater Minnesota collectively reported $652.7 million in net income, Baumgarten said. That worked out to a 10.8 percent margin. ‘In these parts of the state ... you have basically a single large hospital that exerts something resembling monopoly power because there's no competition,’ Baumgarten said. The three largest systems in greater Minnesota are the Rochester-based Mayo Clinic system, the Essentia system in Duluth and Sanford Health, which is based in South Dakota, according to Baumgarten's report.”

The bill speeding up the environmental review and permitting process is on Gov. Dayton’s desk. Stephanie Hemphill at MPR says, “Last year the legislature set a goal for the DNR and Pollution Control Agency to act on permit applications within 150 days. Under the new measure, the deadline counts even if the application is incomplete. The bill allows non-government professionals to prepare permit applications and draft permits, and calls on the Department of Employment and Economic Development to help applicants through the permit process. … The bill also weakens requirements for water conservation programs, especially in the metro area, and allows companies to begin construction before they receive a construction permit.”

The Meridien (Connecticut) Leader-Journal follows its coverage of the extortion plot against Twins pitcher Carl Pavano. Richie Rathsack writes: “Celebrity athletes like Minnesota Twins pitcher Carl Pavano are more vulnerable to blackmail and extortion in the digital age as websites like Facebook allow them and their families to maintain relationships from the past, according to one expert. … ‘Facebook permits relationships long beyond their physical sell-by date,’ said Rich Hanley, Quinnipiac University associate journalism professor, who teaches courses on new media and the web. ‘It really encourages people to retain ties despite movements or changes in their lives. I think many people on Facebook have reached out to old high school classmates. They may not see them for years and it may seem like a benign thing to do.’ Hanley said he wasn’t surprised to read the news about the case and wondered if those types of interactions happen more frequently than people know. ‘In the digital age it’s now easier to find stuff to take you down. That’s why I think a lot of celebrities move away and don’t come back. If you’ve ever been around a group of celebrities, many talk about how they hate it because of the consequences of celebrity,’ Hanley said. ‘Fame is not something one should seek, particularly in the digital age.’ ” There’s at least a good magazine article in that thought.

More on the “vexation” of Gov. Dayton over charitable gambling’s resistance to electronic pull-tabs. At the PiPress, Doug Belden writes: “King Wilson, executive director of Allied Charities of Minnesota, which represents charitable gambling interests, has argued the charities' main priority has always been tax relief, not more revenue. He says that without more significant tax relief, extra money could actually leave some groups in a worse financial position. … Lawmakers have said they are waiting for an agreement on charity financing before proceeding with work on the bill in committee. Some have worried time will run out, particularly if leaders try to adjourn the session next week. But Dayton said there is always time for tasks that the leaders really want to get done. ‘I've seen the Legislature do things in two hours or 20 minutes even,’ he said.” … “if” they want to get it done.

I guess it’s a case of “I like to listen.” Emily Gurnon of the PiPress has the story of the St. Paul hotel clerk and his tape recorder. “A St. Paul hotel desk clerk has been charged with two counts of interference with privacy after allegedly making audio recordings of guests having sex. Jeremiah Caleb Marg, 28, of Burnsville, worked at the 340 Hotel at 340 Cedar St. in downtown St. Paul, according to a complaint filed Friday ... in Ramsey County District Court. On Dec. 28, 2011, a couple staying in Room 1006 on their wedding night called police after they found a recorder under the door of their room, the complaint said. Police noted upon their arrival that ‘the gap under the door between the room and hallway was larger than an inch’, according to a search warrant affidavit filed previously to examine files on Marg's laptop. The couple discovered that the device contained recordings of their lovemaking, as well as recordings of other people having sex, the complaint said. … Marg was summoned to appear in court June 21. The charges are gross misdemeanors. He has a 2002 conviction from Wisconsin for showing sexual material to two juvenile girls, the search warrant affidavit said.” Somebody’s background checking might be a little faulty.

When your home is described as “putrid,” it’s time for a thorough spring cleaning … if not demolition. Paul Walsh and Eric Roper of the Strib write: “A duplex in northeast Minneapolis owned by a clinically diagnosed hoarder is being targeted for city-ordered demolition after it was found reeking of dead cats, animal feces and rotting debris to the point that neighbors couldn't go outside. The City Council on Friday unanimously accepted a recommendation from the director of inspections that the vacant 3,500-square-foot duplex at 1126 6th St. NE. be razed out of safety concerns for the neighborhood just north of Broadway. A city inspection last summer found:
• Seriously damaged ceilings, walls, floors, windows, foundation, roof, appliances and water heater.
• The property full of debris and clutter that included numerous cats, some of them dead.
‘The property produced a smell that emanated from every room in the property due to the debris, animals dead and alive, and the rotting of materials due to leaks in the roof,’ the city said in a document submitted to the council urging the building's demolition.” Always... the dead cats.

There’ll be five more big boxes on the commercial real estate market pretty soon. Best Buy is closing five Twin cities stores. From the Strib, they are:
Edina: 3200 Southdale Circle
Brooklyn Center: 5925 Earle Brown Drive
Hutchinson: 1350 Hwy. 15 S.
Lakeville: 18350 Orchard Trail
Rogers: 20870 Rogers Drive.

Did you catch Strib biz columnist Eric Wieffering’s piece on Best Buy CEO Brian Dunn? “For reasons that are sometimes obvious and sometimes not, investors lose faith. That's the situation confronting Best Buy CEO Brian Dunn. The company's shareholders — its owners no longer seem confident that he's the one capable of leading Best Buy through one of the most trying stretches in the company's 46-year history. Analysts will never come out and say that it's time for an executive to go, but they don't have to. That sentiment is reflected in Best Buy's stock price, which has lost more than a quarter of its value since Dunn ascended to the top job nearly three years ago. Meanwhile, same-store sales — a key retailing metric that measures sales at stores open at least 14 months — have fallen in six of the past seven quarters. … after two years of relentless pressure from Wall Street to stem the loss of market share to online merchants and discounters such as Target, Costco and Wal-Mart, Dunn couldn't persuade them that the store closings and other planned cost reductions would be enough to alter Best Buy's near-term fortunes. So, investors sold with both hands, driving down Best Buy's stock price by almost 7 percent on a day when the Dow finished up. … unless he starts notching some quick wins, Dunn's tenure may prove the shortest.”

Speaking of commercial real estate, freelancer Don Jacobson writes in the Strib: “Sale-leaseback deals are reaching new heights in the Twin Cities as more companies search for ways to free up cash to invest in their businesses. The value of such transactions is expected to jump to $328 million this year compared with $133 million in 2011 and just $35 million in 2010, said Steven Buss, an investment broker and sale-leaseback specialist for the Minneapolis Office of CB Richard Ellis. ‘We've had more sale-leasebacks in the past four months than we've had in the last decade in this market,’ he said. In a sale-leaseback, a company sells the property it owns and occupies, and then leases it back from the new owner, usually in an advantageous, long-term deal. This allows a business to use the money from the transaction to pump into its operations or invest in other ventures. What's driving the trend is a tight lending environment and an overall tough economy, which has forced businesses to find creative ways to generate cash.” The story uses Cargill as an example of a company selling and leasing back … to generate cash?

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Comments (3)

Medical-industrial complex has the patient in their back pocket.

Profit for healthcare going in the wrong pockets?

Bloodletting was a legitimate practice of medicine, some years ago.

Now, bloodletting is done with money-and-mirrors to bleed the very citizens needing affordable care to survive?

Health care and the present law courting the Supreme Court is a bloody mess due to the conservative Heritage think tank and the Republicans conning a compromise... and such a compromised plan - stroking the Insurance industry and the medical complex will not make-it-all-better..

Hospital and revenue.

I worked on a psychiatric unit at the second most prosperous provider in the state for 12 years. The whole time management claimed they were losing money every year. Problem is they sent out annual financial reports to all the employees ever year and when you looked at those they tens of millions of dollars in profits- and that was for a not-for-profit entity. Finally after being told we couldn't possibly get a salary raise for the ten time because the hospital was "losing" money, i.e. only collecting 42 cents for every dollar billed... we produced the annual report and where the deficit was. The response? They stopped sending the annual reports out to employees.

The moral of the story is you can't trust these providers when it comes to revenue claims, they routinely lie to a lot of people about this.

A few things

1) The speed-up/weakening of environmental review practices does NOT sound like a good idea. It may benefit some businesses in the short run, but our laws should be about the long-term health of our state.

2) I read somewhere that charities pay a state tax on their gross gambling receipts before deducting even payouts to winners, while for-profit companies are allowed to deduct all their expenses before paying a tax on their profits. This is definitely not fair to the charities.

3) Did BestBuy shareholders rightly blame its president for actual mismanagement or weak management, or was their company -- like thousands of others -- more a victim of the bankster-caused crash our economy suffered in 2007-2008??