AHRQ: Increased revenues, not cost reductions linked to improved profits

Editor's Note

Increased revenues had a greater impact than decreased costs in hospitals that became more profitable between 2003 and 2013, finds this Agency for Healthcare Research and Quality (AHRQ) study published February 14 online ahead of print in the Journal of General Internal Medicine.

In this analysis of 2,824 hospitals in eight states, those that became more profitable increased per-bed revenues by an average of $113,000 per year. The same group of hospitals reduced per-bed costs by about $10,000 per year. Revenue increases were driven largely by higher non-Medicare insurance payments.

No association was found between improved hospital profitability and changes in DRG weight, number of profitable services, or payer mix. Those that became more profitable were more likely to increase admissions per bed per year.