Managed Care

Hospital profit margins grow while length of stay decreases

While managed care has helped reduce the average length of stay in hospitals, it doesn't seem to have affected hospital profit margins — at least until very recently. In fact, those margins rose between 1993 and 1997 as the average length of hospital stay dropped. Meanwhile, HMO profit margins dropped.

SOURCE: KAISER FAMILY FOUNDATION ANALYSIS OF INTERSTUDY AND HCIA INC. DATA; AMERICAN HOSPITAL ASSOCIATION; HBS INTERNATIONAL INC.

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