The Texas Health Market Review 2025, the 17th report analyzing this dynamic market is now available. It contains 50 pages of data tables, trend graphics and narrative about the health insurers and hospital systems in the state. It describes the strategies that competing health insurers and hospital systems are pursuing, including mergers and acquisitions, new facilities and strategic partnerships. The report includes an analysis of the impact of the Medicaid unwinding that took place after the end of the public health emergency of the COVID-19 pandemic, and which has reduced enrollment in Medicaid HMOs by about 25%.
The data set is a series of Excel spreadsheets with multiple years of detailed data on finances and enrollment for Texas health insurers and finances and inpatient utilization for Texas hospitals. The health plan data is mostly from the annual statements submitted by insurers to the Texas Department of Insurance, and the hospital data is taken from the annual survey conducted by the Texas Department of State Health Services. The data set contains health plan and hospital data for 2023 as well as data from previous years.
Key findings in the new report:
- Hospital systems in the Dallas-Fort Worth and Houston regions improved their profitability in 2023 compared to 2022. Based on data from the state’s annual surveys, hospitals in north Texas saw their combined net income increase by about 33%, from $4.046 billion in 2022 to $5.362 billion in 2023. Their average pre-tax margin grew from 14.4% to 17.2% in 2023. Baylor Scott and White, the largest system in the region measured by net patient hospital revenues, had net income of $1.452 billion, or 22.6% of net patient revenues, while the Texas Health hospitals had net income of $666 million. The HCA Medical City hospitals had pre-tax net income of $1.823 billion or 37.9% of net patient revenues.
- Houston-area hospital systems almost doubled their net income, from $1.843 billion in 2022 to $3.668 billion in 2023. The Memorial Hermann system, the largest in the region, had net income of $543 million in 2023, about the same as in 2022. The HCA Healthcare hospitals improved their net income from $916 million to $1.214 billion. The University of Texas M.D. Anderson Cancer Center, the largest single hospital in the region, saw its net income grow from a one-time loss of $206.6 million in 2022 to a gain of $873.7 million in 2023.
- Hospitals in the Austin region reported net income of $1.131 billion in 2023, or a margin of 11.2%, with the HCA-St. David’s hospitals posting pre-tax net income of $491.7 million or 21.4% of net patient revenues. In the San Antonio region, hospital systems including the University Hospital had net income of $1.29 billion, or 15.1% of net patient revenues. The Baptist hospitals, owned by Tenet Health, and the Methodist system, a joint venture with HCA Healthcare, both had pre-tax margins above 22%.
- Hospital systems continue to make significant investments in new facilities, but the number of inpatient hospital days they provide has grown slowly. In the Dallas-Fort Worth area, inpatient days for all acute care hospitals grew by 2% in 2023. Inpatient days in the Houston area grew by 3% in 2023. Hospital systems have built new micro-hospitals, ambulatory surgery centers and free-standing emergency departments, of which Texas had 338 in May 2023, more than any other state.
- Enrollment in Medicaid HMOs dropped by 1.4 million or 24.4% between June 2023 and June 2024, as Texas re-evaluated the eligibility of Medicaid recipients, which was not done during the COVID-19 public health emergency. Comparing the first six months of 2023 with the same period in 2024, their average medical loss ratios increased from 86.8% to 92.4%, and underwriting margins dropped from 1.7% to 1.2%. The decline in Medicaid coverage and payments will adversely affect hospitals and clinics, especially those seeing large numbers of low-income households.
- Combined net income for Texas HMOs dropped by 19.3% between 2022 and 2023, but they still had an average profit margin of 2.2%. The five UnitedHealthcare HMOs were the most profitable, with combined net income of $1.049 billion (some from operations in other states). The Centene HMOs, including Superior HealthPlan and WellCare, had net income of $260.6 million or 3.3% of underwriting revenues.
- Medicare Advantage plans were especially profitable in 2023, with HMOs reporting underwriting profit of $681.4 million. The UnitedHealthcare HMOs had combined underwriting income of almost $1 billion, and the Humana Medicare HMOs had income of $117.4 million. Enrollment in Medicare Advantage plans has grown steadily, reaching 2.5 million in 2024 or almost 60% of the 4.4 million Texans covered by Medicare.
Table of Contents
Introduction
Methodology
The reports analyzing state health care markets are intended to be a resource to health care organizations facing a full range of challenges but also seeking to identify and benefit from opportunities that present themselves.
This report is presented in three main sections. The first part, Market Structure, describes the major health insurers and hospital systems in the state, showing recent entrants and the high-level of consolidation that has occurred in both the health plan and provider markets. Market Trends, the next section, presents our analysis of enrollment trends and financial results for the health insurers. The last section contains our analysis of financial and inpatient utilization data on the hospitals in the state.
The analysis of health plan companies is based on their annual and quarterly statements filed with the Department of Insurance, including forms prescribed by the National Association of Insurance Commissioners and supplemental reports required by the state. The publisher also uses Medicaid data from the Department of State Health Services and Medicare health plan and hospital data from the Centers for Medicare and Medicaid Services. The publisher has that data together with insights that they have gained in interviews with dozens of leaders in health care organizations in the state.
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