Breaking down U.S. hospital payor mixes

Understanding a hospital's payor mix gives insight into the organization's financial health and performance.

In the Definitive Healthcare HospitalView product, payor mix data represents the breakdown of revenues, charges, discharges and patient days that come from different medical insurance claims payors. The proprietary calculation is based on a facility’s charge and revenue measures in the Medicare Cost Report.

This Healthcare Insight reviews payor mix data for over 5,900 U.S. hospitals and compares the results to previous analysis.

Payor mix classifications

Payor mix classifications include Medicare, Medicaid and private/self-pay/other.

Medicare

Medicaid

Private/Self-Pay/Other

Claims charges from beneficiaries who are 65 and older and part of the Medicare program Claims charges from beneficiaries who are part of state Medicaid programs. Also includes Medicaid Managed Care charges Claims charges from any patients who have private insurance, who do not have insurance or choose to self-pay, Medicare Advantage patients and all other patients

 


Private and self-pay net patient revenue is over $1.4 trillion in U.S.

Total net revenue for Medicaid increased from $260 billion in 2018 to $273 billion in 2020. Between the same time frame, total net revenue for both Medicare and private/self-pay insurance decreased.

The percentage of the total payor mix from private/self-pay increased from 66.5% in 2018 to 67.4% in 2020. The Medicare percentage decreased from 21.8% to 20.5%. These shifts likely reflect some of the delays in care throughout the COVID-19 pandemic.

Additionally, the percentage of total Medicare patient days decreased (42.5% in 2018) and increased for private/self-pay (49.2% in 2018).

National payor mix total and average

 

Fig. 1 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Percent of private/self-pay patient days increased year-over-year

The American population is aging and many state Medicaid programs expanded over the last several years, however trends for Medicare and Medicaid continue to show decreases in hospital patient days. The percentage of patient days covered by private/self-payors has increased from 42.5% in 2010 to 53.3% in 2020.

Average percentage of payor days 2010-2020

 

Fig. 2 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Hospitals with 25 beds or less have highest Medicare patient days

The percentage of payor days correlates to hospital bed count where the percentage of Medicare days declines and the percentage of private/self-pay days increases relative to a hospital's number of beds. Facility specialties, insurance coverage and hospital service area demographics likely contribute to these differences.

Average percentage of payor days by bed size

 

Fig. 3 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Payor days by hospital type often reflect patient demographics

The highest percentage of Medicaid and private/self-pay patient days are at psychiatric hospitals. Critical access and rehabilitation hospitals have over half of their patient days coming from Medicare beneficiaries. This is likely tied to patient demographics.

Average percentage of payor days by hospital type

 

Fig. 4 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Hospitals in the west have lowest Medicare days and highest Medicaid days

Comparing the payor patient days by hospital region shows the Midwest has the highest percentage of Medicare days. Hospitals in the west have the least Medicare days and the most Medicaid days. Northeastern hospitals have more payor days from private/self-payors. Year-to-year changes reflect the national results of payor patient days: increases to private/self-pay days and decreases to Medicare days.

Average percentage of payor days by region

 

Fig. 5 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Six states have more than 50% Medicare payor days

Breaking down the percentage of patient days by state shows swings from the overall average. For example, the average Medicare patient days is over 55% in Nebraska, South Dakota and Mississippi. These three states also have some of the lowest private/self-pay patient days. Pennsylvania has the second highest private/self-pay days and the second lowest Medicaid days.

States with the highest and lowest percentage of payor days

 

Fig. 6 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.


Medicare days decrease and private days increase for Minnesota and New Hampshire

The changes in the percentage of payor days year-to-year by state are outlined below. North Dakota was the only state to see a positive increase in Medicare days. Kentucky had the biggest decrease in the percentage of Medicare patient days.

In terms of patient days percentage for private/self-pay at hospitals, Minnesota and New Hampshire each had percentage points increases over seven and a half since 2018. These two states also had some of the biggest Medicare patient days decreases. Alaska had the highest Medicaid patient days increase and most private/self-pay days decrease 2018 to 2020.

States with the biggest and smallest changes in average percentage of payor days

 

Fig. 7 Data is from the Definitive Healthcare HospitalView product. Data is sourced from the Medicare Cost Report. The most recent data is from the January 2022 release and new data is released quarterly. Accessed February 2022.

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