A COMPARATIVE-ANALYSIS OF REVENUE AND COST-MANAGEMENT STRATEGIES OF NOT-FOR-PROFIT AND FOR-PROFIT HOSPITALS

Not-for-profit (NFP) and for-profit (FP) hospitals were compared on se veral performance indicators including revenues, costs, productivity/e fficiency, and profitability. The indicators were adjusted, where appr opriate, for outpatient activity and a case-mix index for all patients . FP hospitals had higher profit margins as well as higher gross and n et revenues per case-mix adjusted admission. On the other hand, NFP ho spitals had lower total cost per case-mix adjusted admission even afte r subtracting taxes from FP hospital costs. There were no significant differences between the two groups on efficiency and productivity indi cators-paid hours per case-mix adjusted admissions, occupancy levels, and case-mix adjusted ALOS. The higher profits of FP hospitals were at tributed to revenue management rather than cost and efficiency managem ent.