December 4, 2023
New Product: A Comparison of Non-Operating Revenue between Rural and Suburban Hospitals
A new product exploring non-operating revenue (NOR) in rural and urban hospitals was released by the Flex Monitoring Team. NOR is an important source of hospital revenue; some hospitals are able to use NOR to offset operating losses, improve total margins, and remain profitable overall despite experiencing negative operating incomes. NOR, defined as revenue from sources other than patient care and activities closely related to patient care, is comprised of investment income, medical office rental revenue, government appropriations (such as state and local tax transfers and grants), and philanthropic sources.
The new brief, A Comparison of Non-Operating Revenue between Rural and Urban Hospitals, compares the relative percentage and composition of NOR among Critical Access Hospital (CAHs), Rural Prospective Payment System (R-PPS) hospitals, and Urban Prospective Payment System (U-PPS) hospitals. This information may be important to hospital executives seeking to improve financial performance, and to policymakers to understand how non-operating revenue affects hospital financial performance.