Originally published in The Journal of Healthcare Management.

Hospitals with a challenging payor mix (CPM)—high proportions of uninsured and Medicaid patients and a low proportion of commercially insured patients—are an important source of care for low-income, uninsured people. Achieving profitability is difficult for CPM hospitals. From 2005 through 2008, only one-third of 67 CPM hospitals in California reported positive total margins.

In-depth group interviews were completed with the management leadership teams of a diverse group of five profitable CPM hospitals to identify the management strategies and practices that the hospitals’ leadership teams credited with their financial success. Twelve management policy and practice topics were identified. Four of the policies and practices that managers identified involve organizational actions to increase hospital revenue or operational efficiency. These factors are consistent with those identified in previous research.

However, managers also identified eight not previously revealed in research on hospital profitability, including management policies and practices that establish the organizational culture, workforce, relationships, monitoring systems, and governance necessary to ensure that hospital employees and affiliated physicians support and successfully implement organizational actions necessary to achieve profitability.

To read more, please download the PDF.

18 April 2012