Wisconsin Hospital Asks Hospital Profitability Study

Gundersen Lutheran Medical Center disagrees with information from a hospital profitability study that claimed the hospital earned $302.5 million in the year of 2013.

In a hospital profitability study, researchers from Health Affairs drew the conclusion that Gundersen Lutheran Medical Center earned a profit of $302.5 million, or $4,241 per patient, in the year of 2013. Although, Gundersen Lutheran Medical Center claimed that the study was flawed and that its profits were much less than $302 million.

“The researchers utilized incomplete data taken from our Medicare Cost Report, which didn’t involve Gundersen Health System full costs as an integrated system, Scott Rathgaber, Chief Executive Officer and Dara Bartels, Chief Financial Officer, said.

Profits will always seem to be larger when other expenses are not taken into consideration, Rathgaber and Bartels said. In the year of 2013, Gundersen Health System’s contribution margin was 4.4% for its obligated group, which is made up of the La Crosse Hospital, Clinic, Gundersen Lutheran Administrative Services and Gundersen Medical Foundation. Profits in the year 2013 were much less than the $302.5 million reported in Health Affairs. For the past few years, operating margins for Gundersen’s entire system has been in the 4 to 5% range.