by Christine Monahan, Kennah Watts, Julia Burleson, Rachel Swindle, and Ariel Winter
Hospitals provide essential health care, so it is crucial they maintain financial viability and can readily serve their communities. At the same time, spending on hospital services makes up the largest proportion of total national health expenditures, and hospital prices are a key driver of spending. As Americans increasingly struggle to afford both insurance premiums and out-of-pocket medical bills, it is ever more apparent that access to health care and the price of health care are closely interwoven. Policymakers, their staff, and others participating in the policymaking process need to understand the regulations, payment programs, and reporting requirements that apply to hospitals in order to craft targeted, effective reforms that reduce spending while maintaining access to quality care.
To support evidence-based policymaking, our new guide helps readers understand the organizational and financial differences across hospitals in the United States. Through a collection of fact sheets, the guide explains:
- Key questions to ask about a hospital
- Core hospital payment and accounting concepts
- How a hospital’s organizational form, type of care, location, service of low-income patients, teaching status, and alternative payment models influence operations
- Where to find out more about individual hospitals
The guide allows readers to choose the level of detail and focus that is most helpful to them: read the guide straight through, or focus on sections of greatest interest in their preferred order. To help readers figure out where to start, below we highlight what each of the key components offer and how they fit together. The full guide and individual sections and fact sheets are available to read and download here.
How to Use This Guide
This document has four core components, which can be used jointly or individually. The guide is structured to help readers easily pinpoint the most useful information, and throughout the guide, internal links guide the reader between sections. The sections are also color coded to help readers distinguish between major thematic areas.
Questions to Ask (About) a Hospital
Overview: This component outlines the key questions to ask about a hospital to better understand the regulatory scheme under which it operates, the funding streams it may have available, and other factors that influence its business practices and financial status. These questions correspond to the six hospital categories discussed in more detail in the “Key Facts on Hospitals” component below.
How to Use This Component: This section can serve as a framework or line of questioning for policymakers to learn more about specific hospitals. With brief answers, these questions cover the essential high-level information to know about a hospital and offer a quick resource for readers without much time.
Hospital Payment and Accounting Explainer
Overview: This component demystifies complex hospital payment systems and outlines how hospitals are paid for care. It details the key terms and concepts related to hospital revenue, as well as how each major payer type –– Medicare, Medicaid, and commercial plans –– pays hospitals. It also provides an overview of public sources of hospital cost and financial accounting information, and key hospital finance measures.
How to Use This Component: This section can serve as a 101 explainer of hospital payment, as well as a glossary of key terms. Readers can also refer back to this explainer when reading the key facts component to connect specific federal policies to payment or to better understand data points on hospital finances.
Key Facts About Hospitals
Overview: Through a series of short fact sheets, this component provides readers with information on important hospital classifications and explains how those groupings influence hospital operations and finances. These key facts are divided into six color-coordinated collections, each associated with a method to classify hospitals:
- Organizational form (blue)
- Type of care (green)
- Geographic location (yellow)
- Service of low-income patients (orange)
- Teaching status (red)
- Participation in alternative payment models (purple)
Our approach to grouping hospitals is largely informed by distinctions drawn in federal law and regulations, especially the Medicare program.
How to Use This Component: Use this section to dive deep into specific hospital categories. Each collection starts with a brief overview of how a certain hospital classification influences operations and finances, which expands on the “Questions to Ask (About) a Hospital” component of the guide. Following the overviews are one or more individual fact sheets for the specific forms a hospital may take or programs in which they may participate within that category. Each collection –– except participation in alternative payment models –– concludes with a “By the Numbers” section with relevant data from Medicare Cost Reports and other information sources, to the extent available. Readers can also refer back to the Hospital Payment and Accounting Explainer to pair key payment concepts with more detail on payment methods.
Where to Find Out More
Overview: This component identifies resources for readers who want to apply the information in this guide and learn more about an individual hospital. It includes links to more information on hospital ownership; regulatory and payment classifications; and finances, operations, and quality performance.
How to Use This Component: This component directs readers to external, independent databases that will allow them to dive deeper into a specific hospital.
How to Read and Download This Guide
To improve usability, we provide several ways to read and download the guide. Readers can flip through the guide and see side-by-side pages with the flipbook feature on the website homepage. For readers who prefer a PDF or printed version of the guide, it is available for download here. For readers who prefer to pull out specific sections or singular fact sheets, these pieces of the guide are available for individual download through the table of contents on the homepage.
