Hospital Business Insights
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CEO Salaries and Costs:
- The average 2020 health care CEO salary is $153,084.
- CEO salaries range from $72,000 to $392,000.
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Hospital Finances:
- Hospitals spend the most money on wages and benefits (56% of expenses).
- Primary revenue source is fees paid by patients for services and supplies.
- Average emergency room cost is $2,500, and hospital stay cost is $15,000.
- Hospital profit margin is about 10%.
Owning and Operating a Hospital
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Financial Aspects:
- Owning a hospital can be financially rewarding.
- Payers may pay more for services provided in hospitals.
- Building a hospital costs between $60 million and $190 million.
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Physician Relations:
- Hospitals target physicians with better paying patient populations.
Challenges and Strategies
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Startup Challenges:
- High startup costs for construction, equipment, and supplies.
- Experience required to operate a hospital effectively.
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Increasing Profitability:
- Boost patient satisfaction and quality service.
- Reduce readmissions and unnecessary testing.
- Understand revenue cycles and invest in health IT systems.
Hospital Industry Trends
- Physician and surgeon pay is highest in hospitals.
- U.S. hospitals recorded a 6.5% operating margin in 2019.
- Nearly two-thirds of U.S. hospitals are nonprofit.