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Net Patient Revenue (NPR)

What is net patient revenue (NPR)?

Net patient revenue (NPR) is the total revenue generated by a healthcare facility from patient services after subtracting any allowances, discounts, and contractual adjustments. It represents the amount of money collected from payors, including private insurance, self-payments, Medicare, and Medicaid.

Net patient revenue excludes several factors that can impact a healthcare organization's finances, including contractual adjustments, charitable donations, foundation earnings, and bad debt.

  • Contractual adjustments: These are adjustments made to payments from payors based on pre-negotiated contracts.
  • Charitable donations: Donations are not considered patient revenue and, therefore, aren't included in NPR.
  • Foundation earnings: Income generated by a healthcare organization's endowment or investments is also excluded from NPR.
  • Bad debt: This refers to money owed by patients that the healthcare organization is unlikely to collect. Bad debt, also called uncompensated care, is typically accounted for separately from NPR.

Why is net patient revenue (NPR) important to healthcare?

Net patient revenue is important because it indicates healthcare organizations’ financial strength. By monitoring NPR, healthcare organizations can:

  • Track their revenue streams from patient services, including any changes over time, and identify areas for improvement
  • Budget effectively and plan for future expenses and investments
  • Evaluate the effectiveness of their pricing and discounting strategies
  • Make informed business decisions about resource allocation and service offerings
  • Compare their financial performance to historical data and industry benchmarks

In addition to the points above, NPR can also be helpful for benchmarking a healthcare organization's performance against its competitors. By comparing NPR metrics, healthcare organizations can identify areas for improvement and develop strategies to become more financially efficient.

Overall, NPR provides a clear picture of how much money a healthcare organization brings in from patient care, which is essential for ensuring its long-term financial stability.