Rural Hospitals with Long‐term Unprofitability
Overview
To remain open, businesses generally need to be profitable (have revenues greater than expenses). Hospitals are no different. Hospitals use profits to pay for new and upgraded buildings, equipment, technology, programs, and other patient care needs. To assess hospital profitability, we often look at total margin. Total margin measures the control of expenses relative to revenues, and expresses the profit a hospital makes as a proportion of revenue brought in. For example, a five percent total margin means that a hospital makes five cents of profit on every dollar of revenue.