Hospital Operating Costs and Performance Benchmarks Report

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The Milliman Hospital Operating Costs and Performance Benchmarks report combines Medicare cost reports and fee-for-service experience data with Milliman benchmarks and case-mix and severity-adjustment methodologies to help you benchmark your operating costs and financial performance against a set of peer facilities, as well as statewide and nationwide averages.

In addition, this instantaneous, powerful, and cost-efficient report allows you to:

  • Identify areas of excellence and determine your potential for improvement.
  • Increase profitability on your Medicare business.
  • Gain an advantage in your reimbursement contracting efforts.
  • Prove your competitive value to payers through data-driven metrics.
  • Identify primary cost drivers.
  • Make an informed plan for your facility's future growth.

We developed this report based on our extensive experience helping hospitals benchmark their costs in order to assess their relative competitiveness, uncover areas for improvement, and assist in data-driven contract negotiations.

The report provides actionable information regarding hospital operating costs, hospital margins, case-mix and patient severity-adjusted billed charges, and RVU-weighted length-of-stay relativities.

Milliman benchmarks

The report leverages Milliman’s RBRVS for Hospitals™ in order to case-mix and severity-adjust hospital claims data. This fee schedule assigns Relative Value Units (RVUs) to hospital inpatient and outpatient services. RVUs represent the relative amount of resources required for each service and provide a superior case-mix and severity-adjustment to what is possible with other sources of relative weights, such as Medicare relative weights.

Dividing allowed charges by total RVUs for a given hospital results in an allowed conversion factor, which measures the relative cost per RVU. These conversion factors can be compared directly across hospitals. A hospital with a higher conversion factor is receiving a higher reimbursement per unit of work than a hospital with a lower conversion factor.

Consulting services

Our consultants can help you review your negotiation process and suggest point-by-point improvements. They can also help you design a report package that will leverage your strengths and help you with data-driven negotiations. Additionally, they can access our comprehensive databases to create more detailed custom reports than the standard set available on demand through this website.