Groups Trying to Make Hospital Prices Clear

by Mark Friedman  on Monday, Sep. 16, 2013 12:00 am  

Baptist Health’s CFO Bob Roberts said Baptist helps patients estimate costs.  St. Vincent and other hospitals now use net revenue as their top-line figure.

The difference can be millions of dollars a year. For example, the Arkansas Heart Hospital in Little Rock reported $405.6 million in total patient revenue for the fiscal year that ended Sept. 30, 2009. But it also had $288.3 million in contractual allowances and discounts on patients’ accounts, which made the net revenue $117.3 million.

It is the net revenue figure that Arkansas Business has traditionally sought out when ranking hospitals among the state’s largest private companies, since businesses in other industries don’t typically claim revenue that they never receive and don’t even expect to receive.

Mark McGinnis, the chief financial officer at St. Vincent Health System of Little Rock, said most hospital systems have moved to the new accounting of revenue and now the change isn’t a big deal to hospital CFOs.

“Most people would argue it makes the financial statement more readable to the typical reader,” McGinnis said.

 

 

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