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Payor Mix

What is payor mix?

Payor mix measures patients who have federal health insurance, such as Medicaid and Medicare, compared to patients who pay themselves or have private medical insurance. Accordingly, payor mix tracks which payor funds healthcare costs.  

Why is payor mix important to healthcare?

Payor mix is important because it monitors how healthcare facilities, like hospitals, are compensated. Specifically, federal health insurers compensate hospitals at a lower rate than self-payor or private medical insurance providers compensate hospitals. Payor mix can then determine which hospitals have an excess budget and may invest in new technology and supplies. Essentially, understanding hospitals’ payor mix creates a clearer picture of hospitals’ financial wellbeing, thus helping to analyze the complex healthcare market.