title: A comparative analysis of revenue and cost-management strategies of not-for-profit and for-profit hospitals.
abstract: Not-for-profit (NFP) and for-profit (FP) hospitals were compared on several performance indicators including revenues, costs, productivity/efficiency, and profitability. The indicators were adjusted, where appropriate, for outpatient activity and a case-mix index for all patients. FP hospitals had higher profit margins as well as higher gross and net revenues per case-mix adjusted admission. On the other hand, NFP hospitals had lower total cost per case-mix adjusted admission even after subtracting taxes from FP hospital costs. There were no significant differences between the two groups on efficiency and productivity indicators--paid hours per case-mix adjusted admissions, occupancy levels, and case-mix adjusted ALOS. The higher profits of FP hospitals were attributed to revenue management rather than cost and efficiency management.
authors.affiliation: Williamson Institute, Virginia Commonwealth University, Richmond 23298, USA.
authors.forename: R K
authors.initials: RK
authors.lastname: Shukla
authors.forename: J
authors.initials: J
authors.lastname: Pestian
authors.forename: J
authors.initials: J
authors.lastname: Clement
mesh_terms: D000704:Analysis of Variance; D003159:Community-Institutional Relations; D003953:Diagnosis-Related Groups; D017598:Efficiency, Organizational; D005377:Financial Management, Hospital / Q000706:statistics & numerical data*; D006302:Health Services Research; D017721:Hospital Costs; D006777:Hospitals, Proprietary / Q000191:economics*; D006788:Hospitals, Voluntary / Q000191:economics*; D007182:Income; D013660:Taxes; D014768:Virginia