As you can imagine, running a hospital is expensive, regardless of whether the hospital is a small rural facility or is central to a bigcity.
Operating expenses for hospitals, as defined by the Health Resource and Services Administration (HRSA), are expenses incurred as part of the delivery of care. Operating expense examples include salaries and benefits of staff and providers, employed and contracted physicians, medical supplies, and interest and depreciation on buildings and equipment used in caredelivery.
What costs hospitals the mostmoney?
A hospital’s operating cost breakdown may differ among facilities. However, the list of operating expenses generallyincludes:
- Construction andrenovation
- Foodservice
- Hospitalsalaries
- Hospital and medicalequipment
- Medical and surgicalsupplies
- Patientmedications
- Software and ITsolutions
Of these operating costs, the three biggest expenses for hospitals are salaries, medical and surgical supply costs, and fringebenefits.
Understanding what drives hospital expenses and which hospitals cost the most to operate can help map the financial landscape of the American healthcaresystem.
Using the Definitive Healthcare HospitalView product, we have listed the top 25 hospitals in the U.S. with the highest total operating expenses. The data is from the Medicare Cost Report and is according to the most recent 12-month interval tracked in ourdatabase.
Which hospitals have the highest operatingexpense?
The top hospital in the U.S. by operating expense is NewYork-Presbyterian Weill Cornell Medical Center. Unsurprisingly, this New York City-based hospital also tops the list of hospitals with the highest accrued salary, housekeeping, and dietary expenses, as well as the lists of hospitals with the highest operating room and medical supply costs. Additionally, New York-Presbyterian Weill Cornell Medical Center is one of the top U.S. hospitals by patient discharges. The high patient volume, as well as high individual expenses, may explain why this hospital tops the list of hospitals with the highest operatingexpenses.
In second place by operating expense is Cleveland Clinic Main Campus. This hospital also tops the list of hospitals with the highest accrued salary expense (second place). Additionally, it makes the list of hospitals with the highest bed count and highest number of operating rooms. Being able to accommodate so many patients and procedures may be one of the major factors landing this hospital on the list of top hospitals by operatingexpense.
The third top hospital by operating expense is Tisch Hospital. Like the other top hospitals, Tisch Hospital tops other hospital expense lists such as accrued salary expense (fifth place), operating room costs (seventh place), and housekeeping expense (secondplace).
How does non-profit hospital status influence operatingexpenses?
The three top hospitals by operating expense listed above are all non-profit hospitals. Compared to for-profit healthcare organizations, non-profit healthcare organizations tend to be located in higher-income areas and therefore serve higher-income populations. In these wealthier areas, like New York City where two of the top facilities are located, hospitals are likely to have higher costs for expenses such as salaries, benefits, and facility construction and upkeep, which would all drive higher total operatingexpenses.
Additionally, these top three hospitals rank as the top three non-profit hospitals by net patient revenue (NPR). Based on the high NPR for these hospitals, it is reasonable to conclude that they see a higher volume of patients, requiring that they have more providers, staff, equipment, and facilityspace.
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