Research Note: Relative Profitability of Acute Care Hospital Services (2d Edition)

106 Pages Posted: 29 Mar 2022

See all articles by Jill R. Horwitz

Jill R. Horwitz

UCLA School of Law; National Bureau of Economic Research (NBER)

Sayeh Nikpay

University of Michigan at Ann Arbor

Jacqlyn Blatteis

University of California, Los Angeles (UCLA) - School of Law

Steven Levick

University of California, Los Angeles (UCLA) - School of Law

Eleonore De Vos

University of California, Los Angeles (UCLA) - School of Law

Austin Nichols

The Urban Institute; Abt Associates

Date Written: June 2021

Abstract

This research note categorizes acute care hospitals services as relatively profitable, relatively unprofitable, variably profitable, or uncertain. It updates “Research Note: Relative Profitability of Acute Hospital Services,” an online exhibit to Horwitz, “Making Profits and Providing care: Comparing Nonprofit, For-Profit, and Government Hospitals,” Health Affairs 24, no. 3 (2005): 790-801. Whether a service is likely to be profitable for any individual hospital depends on many circumstances, such as the patient population most likely to receive it, market conditions, insurer and government policies at the time the service is adopted and provided, the management priorities and skills of the hospital executives, and a host of other factors. Consequently, despite the rigorous nature of this service review, our relative profitability designations do not mean that a service is, in fact, profitable for hospitals, even most of the time. This note offers a simple categorization of relative profitability, not absolute profitability. This note attempts to suggest what services a typical administrator, faced with the decision of whether to adopt or discontinue a service, would reasonably consider to be relatively profitable or not. The services reported in this document address the major service areas offered by full-service, acute care hospitals. They are all represented, in some form, in the American Hospital Association Annual Surveys. In addition to medical services, we newly include profitability designations for the community outreach services listed in the AHA surveys. Because these services are not medical services, we have listed them separately at the end of this Research Note.

Keywords: health care, acute care hospital services, Non-profit, for-profit and government hospitals, relative profitability of services, American Hospital Association annual surveys

JEL Classification: I11, I13

Suggested Citation

Horwitz, Jill R. and Nikpay, Sayeh and Blatteis, Jacqlyn and Levick, Steven and De Vos, Eleonore and Nichols, Austin and Nichols, Austin, Research Note: Relative Profitability of Acute Care Hospital Services (2d Edition) (June 2021). UCLA School of Law, Public Law Research Paper No. 22-13, Available at SSRN: https://ssrn.com/abstract=4065964

Jill R. Horwitz (Contact Author)

UCLA School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Sayeh Nikpay

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Jacqlyn Blatteis

University of California, Los Angeles (UCLA) - School of Law

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Steven Levick

University of California, Los Angeles (UCLA) - School of Law

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Eleonore De Vos

University of California, Los Angeles (UCLA) - School of Law

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Austin Nichols

Abt Associates ( email )

MD 20814
United States

The Urban Institute

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