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    Summary of “Most Hospitals Routinely Lose Money on Medicare Hospitalizations”

    Figure 1

    Figure 1. Average Medicare Cost-to-Charge Ratio and Payment-to-Cost Ratio by Hospital Type

    Figure 1. Average Medicare Cost-to-Charge Ratio and Payment-to-Cost Ratio by Hospital Type

    Source: Authors’ analysis of 2021 Healthcare Cost and Utilization Project’s National Inpatient Sample (HCUP NIS), Medicare Standard Analytic Files (SAF) 2021, inpatient discharges (claims), the American Hospital Association’s Annual Survey Database fiscal year 2021.

    Figure 1 Overview

    The figure contains a bar chart that compares the average cost-to-charge ratio and average payment-to-cost ratio by hospital types. It shows that for-profit hospitals have the smallest average cost-to-charge ratio and the largest average payment-to-cost ratio, meaning for-profit hospitals received larger payments for each cost than not-for-profit hospitals.

    Figure 1 Values

      All Hospitals Not-for-profit For-profit Teaching Non-teaching Not-for-profit teaching
    Average Cost-to-Charge Ratio 28.0% 30.4% 14.9% 26.7% 27.1% 28.7%
    Average Payment-to-Cost Ratio 87.0% 85.7% 95.8% 90.4% 82.5% 89.2%

    Figure 1 Presentation

    The bar chart represents the differences in average Medicare cost-to-charge ratios and average payment-to-cost ratios by hospital type. The x-axis represents the type of hospital from left to right: All Hospitals, Not-for-profit, For-profit, Teaching, Nonteaching, Not-for-profit teaching. The average cost-to-charge ratio for each hospital type is represented by a teal bar. The average payment-to-cost ratio for each hospital type is presented as a blue bar. The averages are presented as percentages at the top of each bar.

    Figure 2

    Figure 2. Average Medicare Loss Per Inpatient Fee-for-Service MS-DRG Discharge

    Figure 2. Average Medicare Loss Per Inpatient Fee-for-Service MS-DRG Discharge

    Source: Authors’ analysis of 2021 Healthcare Cost and Utilization Project’s National Inpatient Sample (HCUP NIS), Medicare Standard Analytic Files (SAF) 2021, inpatient discharges (claims), the American Hospital Association’s Annual Survey Database fiscal year 2021.

    Figure 2 Overview

    The figure contains a bar chart that compares the average loss per Medicare inpatient fee-for-service discharge, with not-for-profit and teaching hospitals experiencing the greatest losses.

    Figure 2 Values

    All hospitals Not-for-profit For-profit Teaching Nonteaching Not-for-profit teaching
    -$2,244 -$2,553 -$572 -$1,735 -$2,676 -$2,027

    Figure 2 Presentation

    The bar chart represents losses per inpatient fee-for-service discharge, where losses are presented as negative whole numbers for each hospital type from left to right: All hospitals, Not-for-profit, For-profit, Teaching, Nonteaching, and Not-for-profit teaching.