Hospital Financial Data Interactive Series: Hospital Average Cost and Profitability Delivering Patient Care
From 2014–2021, comparable hospitals in California saw a 49.7 percent increase in total net patient revenue per adjusted discharge and a 52.1 percent increase in total operating expenses per adjusted discharge statewide.
Hospital Average Cost and Profitability Delivering Patient Care Introduction
The Hospital Financial Data Interactive Series presents data visualizations built from the financial reports that all California hospitals are required to submit annually to HCAI. The visualizations were created to help assess hospital financial status and service volume and to advance healthcare and cost transparency.
This is the third topic of the interactive series. These visualizations are focused on specific financial data items related to the cost of delivering care collected in the annual financial data, presented per adjusted discharge. Additional topics in this visualization series covering hospital financials and utilization can be found on the Hospital Financial Data Interactive Series landing page.
The HCAI Financial Data includes both inpatient and outpatient dollars to show the cost of care in various care settings and by specific episodes of care. The purpose of “adjusting” the discharges is to account for outpatient care volume. See the notes contained within the hover icon in each visualization to learn more about the adjustment for each financial data item.
Users can switch between five different cost and profitability topics—Gross Patient Revenue, Net Patient Revenue, Operating Revenue, Operating Expenses, and Operating Income—using the navigation buttons at the top of the visualization. By default, the visualizations display aggregate amounts for all California hospitals. The drop-down menus allow users to select the data for specific counties, cities or facilities of interest, or by teaching/rural facility designation or hospital control (ownership) type.
The visualizations in this series include fully audited data on comparable hospitals for the calendar years 2014–2021. For more information, see the section labeled “How HCAI Created this Product”. Kaiser, state, and psychiatric health facilities are not included, as they submit data differently than other hospitals. Per SB 343, Kaiser Permanente began submitting annual financial files for the 2022 fiscal year end by individual facility, similar to other hospital systems. Data for the year 2022 and subsequent years will reflect this change.
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How HCAI Created this Product
- The data within the HCAI Hospital Annual Financial Data series was pulled from the facility-level information that all individual hospitals and hospital systems are required to report annually to HCAI. The information collected consists of data on services capacity, inpatient/outpatient utilization, patients, revenues and expenses by type and payer, balance sheets and income statements, all available in a complete dataset. The Selected Data Tables—condensed tables containing a wide range of the most commonly-used data items—were used to create the visualizations in the series. For more information about the data tables used, see the Hospital Annual Selected File – Documentation.
- Payer categories used in the Hospital Annual Financial Data series are based on the standard regulatory definitions used in reporting, sourced from the HCAI Accounting and Reporting Manual for California Hospitals. These definitions can also be found in the Glossary section.
- Definitions for relevant terminology and the calculations used can be found in the Glossary section.
For more information on the HCAI financial data products, please visit the following links:
Glossary
| Glossary Terms | Definition |
|---|---|
| Adjusted Discharge | A scaling factor to account for outpatient care volume and is calculated by dividing gross patient revenue by gross inpatient revenue and multiplying by total discharges. |
| Operating Revenue | Obtained by adding net patient revenue with other operating revenue. |
| Operating Expenses | Direct expenses incurred by various cost center groups for providing patient care. |
| Operating Income | Obtained by subtracting total operating expenses from operating revenue (net patient revenue plus other operating revenue). |
| Net Patient Revenue | The amount of revenue received from patients and third-party payers after subtracting the deductions from revenue from the sum of gross patient revenue and capitation premium revenue. |
| Payer Terms | |
| Medicare – Traditional | Includes patients covered under the Social Security Amendments of 1965 enrolled in a fee-for-service (FFS) plan. |
| Medicare – Managed | Includes patients covered under the Social Security Amendments of 1965 enrolled in a managed care plan funded by Medicare. |
| Medi-Cal – Traditional | Includes patients qualified as needy under state laws and covered by a fee-for-service (FFS) plan. |
| Medi-Cal – Managed | Includes patients qualified as needy by state laws and covered by a managed care plan funded by Medi-Cal. |
| County Indigent – Combined | Includes both County Indigent – Traditional and County Indigent – Managed. |
| County Indigent – Traditional | Includes patients covered under Welfare and Institution (W&I) Code Section 17000, including those programs funded in whole or in part by County Medical Services Program (CMSP), California Health Care for Indigents Program (CHIP) and/or Realignment Funds. |
| County Indigent – Managed | Includes patients covered under Welfare and Institution (W&I) Code Section 17000 who are enrolled in a managed care plan funded by a county. |
| Third Party – Traditional | Includes all other forms of health coverage excluding managed care plans. This term maps to commercial in most other HCAI data sources. |
| Third Party – Managed | Includes patients covered by managed care plans other than those funded by Medicare, Medi-Cal or a county. This term maps to commercial in most other HCAI data sources. |
| Other Indigent | Includes indigent patients provided with charity care by the hospital and UC teaching hospital patients that are provided care with Support for Clinical Teaching funds. |
| All Other | Includes all other financial classes not covered above. |
See the Hospital Annual Selected File – Documentation for a full glossary of relevant terminology.
Additional Information
Topic: Cost Transparency
Source Link: Hospital Financials
Citation: Hospital Annual Financial Data — Selected Data & Pivot Tables, 2014–2021
Temporal Coverage: 2014–2021
Spatial/Geographic Coverage: Statewide
Frequency: Annually