CEDAR RAPIDS – St. Luke’s Hospital officials dispute a listing that ranks the Cedar Rapids hospital as the fourth most profitable in the country.

In today’s edition of Forbes Magazine, Wednesday, Sept. 1, a story called America’s Most Profitable Hospitals states that St. Luke’s has an operating margin of 36 percent.

St. Luke’s officials said the hospital’s true operating margin last year was 5.4 percent.

Forbes magazine received their information from the American Hospital Directory, which uses financial data reported by hospitals to the Centers for Medicare and Medicaid Services. 

“The article incorrectly states that St. Luke’s Hospital is one of America’s Most Profitable Hospitals and has inaccurately posted that we have an operating margin of 36 percent,” hospital officials wrote in a statement.

“St. Luke’s is not alone in disputing the data source with the American Hospital Directory.”

Officials noted that the information does not accurately reflect St. Luke’s complete financial picture because many support services and administrative department expenses were omitted from the directory’s calculation of operating margin. 

St. Luke’s expenses were correctly reported on the cost report submitted to Medicare, they said.

The article quotes Scott Kallemeyn, director of operations support at St. Luke’s, who notes that payments to its parent hospital system for information technology and financial services weren’t captured, nor is equipment depreciation.

Forbes’ article, by David Whelan, states that some hospitals “make colossal profits. Are they running a tight ship or using monopoly power to overcharge patients?”

The article found that 24 hospitals in the country with over 200 beds make an operating margin of 25 percent or more and compared the profit margins to companies like drug giant Pfizer.

Flowers Medical Center in Dothan, Ala., was cited as the most profitable hospital, with a 53 percent operating margin. Flowers is part of a for-profit chain.

St. Luke’s, part of the Iowa Health System, is a non-profit, so revenue is reinvested back in the hospital.

Iowa Health System is the sixth largest nondenominational health system in America, with annual revenues of $2 billion, the group notes on its website. Seven hospitals belong to the Iowa Health System, with a total of 25 affiliated hospitals.

See the new Forbes ranking,