How Much Does a Hospital Owner Make?

Hospital Business Insights

  • CEO Salaries and Costs:

    • The average 2020 health care CEO salary is $153,084.
    • CEO salaries range from $72,000 to $392,000.
  • 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

  • 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.
  • Physician Relations:

    • Hospitals target physicians with better paying patient populations.

Challenges and Strategies

  • Startup Challenges:

    • High startup costs for construction, equipment, and supplies.
    • Experience required to operate a hospital effectively.
  • 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.

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