Understanding Various Metrics for Assessing Hospital Finances: A Cheat Sheet

Profit margins are the most common measure of financial performance. They can be positive (if the hospital makes a profit) or negative (if the hospital loses money). Reported margins vary depending on the metric used, how the metric is calculated, the data, accounting decisions, and how the data is summarized (e.g., averages versus medians). Several other metrics are also helpful in understanding a hospital’s financial situation, such as days cash flow. Comparing measures across hospitals can be difficult due to the lack of standardized reporting requirements. Learn more key facts about hospitals and their finances.