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Hospital Profitability

HealthLeaders magazine, June 12, 2008
In an uncertain reimbursement climate that includes projections that Medicare could go broke in 11 years, hospitals are increasingly being forced to get more creative in their efforts to maintain previous levels of profitability. Although there is no single magic formula for a healthy margin, one key is efficiency. A study that compared the nation's most profitable hospitals to their less profitable brethren found that high-profit hospitals have shorter average length of stay, lower operating expenses per discharge, and a higher case mix index, suggesting that the most profitable hospitals find ways to provide care more efficiently even when they see higher-acuity patients.