Money Matters: Hospitals

HospitalIt may seem to be morally wrong to look at hospitals as moneymakers. But it’s true: for-profit medical centers coexist with non-profit ones, and both of them deal with a lot of money on a regular basis. Going full circle financially also has its share of challenges, since a lot of cash has to come from a lot of patients—two things that are difficult to track from admittance to release. For that, hospitals have companies like Nearterm to thank for such services.

When it comes to money matters, hospitals have their own share of interesting facts and peculiarities. It’s mainly due to how differently they conduct business compared to other organizations.

Revenue Talks

Lena Sun of The Washington Post previously wrote about America’s biggest-earning hospitals. That line alone isn’t exactly remarkable, but here’s the kicker: most of them are non-profits. Sun cites 7 of the most profitable hospitals in the U.S. being non-profit facilities that earned $150 million or more.

La Crosse, Wisconsin’s Gunderson Lutheran Medical Center topped the list. According to data from Washington and Lee University and the Johns Hopkins Bloomberg School of Public Health, the hospital earned $302.5 in revenue from its array of patient-care services. The University of Pennsylvania Hospital in Philadelphia is also included in the list ($184.5 million), as well as the Stanford Hospital in Palo Alto, California.

Pricing Concerns

It’s no secret that healthcare can cost a fortune in America. This then leads one to ask: how do hospitals price their services? No concrete answer exists because pricing is extremely complex. Murray Askinazi of Lawrence Hospital Center in New York explains that charges are calculated based on mainly arbitrary factors. For example, fees for an MRI may include the cost of leasing the machine, staff salaries, electric bills, and cleaning costs, and even wear-and-tear into the final bill computation.

Technological advancements are another reason for increasing prices. A high-tech surgery (i.e. one which uses a robotic arm) may be billed exponentially compared to a traditional one, notwithstanding the costs of the hospital stay. This is especially true in hospitals offering a high-tech service for the first time, as equipment costs need covering.

Money matters concern hospitals as much as every other establishment that needs to pay its dues. The only difference is that they do things in another way.