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Primer on Interpreting Hospital Margins

Total margins, operating margins, payer-specific margins, simple or aggregate average margins, payment-to-cost ratios — what do they all mean, how do they differ, and how do they relate? A brief primer from the Sheps Center for Health Services Research provides the answers and explains how the type of margin or other profitability measure used can make a difference in the resulting analysis.

To view trends in total, operating, and patient hospital margins and hospital payment-to-cost ratios for Medicare, Medicaid, and private payers, see AHA’s annual Chartbook chapter on trends in hospital financing.


North Carolina Rural Health Research and Policy Analysis Center. A primer on interpreting hospital margins. Cecil G. Sheps Center for Health Services Research, University of North Carolina, July 2003. http://www.shepscenter.unc.edu/rural/pubs/other/Primer.pdf

Trends in hospital financing – chapter 3. Chartbook: trends affecting hospitals and health systems. American Hospital Association, 2012. http://www.aha.org/research/reports/tw/chartbook/ch4.shtml

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

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