I read a recent Becker’s Hospital Review analysis on hospital expenses per adjusted inpatient day with a strong sense of recognition—not surprising, but recognition. The data mirrored patterns I have lived across decades in healthcare leadership, and it compelled me to respond because headlines rarely capture what hospital costs actually represent to patients, families, clinicians, and leaders trying to do the right thing under imperfect conditions (Becker’s Hospital Review, 2026).

At first glance, the findings feel unsettling. Conventional wisdom suggests that organizations designed to generate profit should, by definition, be more expensive. Yet Becker’s, drawing on Kaiser Family Foundation State Health Facts, continues to show that in many states, for-profit hospitals report lower expenses per adjusted inpatient day than nonprofit and government hospitals (Kaiser Family Foundation [KFF], n.d.). This raises a deeper question that matters far beyond spreadsheets: if nonprofit and government hospitals exist to serve the public good, what do for-profit hospitals exist to do?

My perspective is shaped by lived experience. I have worked across both nonprofit and for-profit healthcare systems, including serving in senior executive roles within for-profit organizations. I remember monthly operational reviews with absolute clarity. Balanced scorecards were not theoretical tools; they were moments of truth. Every metric mattered. Every variance demanded explanation. Financial performance, throughput, staffing, quality, and experience indicators were reviewed line by line. Incentive compensation was directly tied to outcomes. These meetings were often uncomfortable, but they created focus, accountability, and rapid course correction. It would be disingenuous to deny that this level of operational discipline plays a role in controlling costs.

To understand why these differences appear in national data, it is essential to understand what the metric itself represents. Expenses per adjusted inpatient day is not a price, a charge, or a patient bill. It reflects total hospital operating expenses divided by inpatient days that have been adjusted to account for outpatient service volume. This measure captures staffing models, infrastructure, service lines, and organizational complexity across the enterprise—not the human experience of care at the bedside. Importantly, this metric does not account for differences in mission, teaching intensity, or safety-net responsibility, which means cost comparisons without context are easy to misread (KFF, n.d.).

For-profit hospitals are structurally designed to manage and constrain operating costs. Financial performance is embedded in governance, executive oversight, and incentive structures. Decisions about service lines, staffing models, supply chains, and capital investment are guided by margin discipline and return on investment. In contrast, nonprofit and government hospitals are far more likely to carry services that are essential to communities but financially unsustainable, including trauma centers, burn units, inpatient behavioral health services, and comprehensive emergency care for uninsured and underinsured populations.

Federal policy implicitly acknowledges this imbalance through mechanisms such as Disproportionate Share Hospital payments, yet these payments rarely cover the full cost of care delivered (Medicare Payment Advisory Commission [MedPAC], 2024).

This dynamic is deeply personal to me. Earlier in my career, when I served as an administrator in a nonprofit hospital, I was responsible for front-end insurance authorization and oversight of the hospital’s charity care program. That responsibility intensified for hospitals after the implementation of the Emergency Medical Treatment and Labor Act (EMTALA), which mandates emergency care regardless of a patient’s ability to pay. While EMTALA is essential for access and equity, it fundamentally altered the cost structure of nonprofit and public hospitals. We routinely delivered complex, resource-intensive care for which reimbursement covered only a fraction of the actual cost. The unrecovered balance did not disappear; it was absorbed into operating expenses and embedded into the very metrics now used to compare hospitals across ownership models.

When nonprofit hospitals appear more expensive on measures such as expenses per adjusted inpatient day, those figures often reflect obligation, not inefficiency. Teaching intensity further widens this gap. Academic medical centers—overwhelmingly nonprofit or government-owned—incur additional costs related to residency programs, faculty supervision, research infrastructure, and complex tertiary and quaternary care. Medicare explicitly adjusts payments for teaching hospitals because these institutions face systematically higher costs (MedPAC, 2024).

What cost data often fail to capture, however, is how patients experience these systems. Fear while waiting for answers. Confusion navigating fragmented processes. The vulnerability of placing trust in strangers during moments of illness. Patient experience is not a soft concept; it is the human lens through which safety, dignity, communication, and trust are felt.

Research summarized in Health Affairs demonstrates that hospitals with stronger patient experience performance also show lower readmission rates and better outcomes for several conditions, reinforcing that experience and quality are deeply interconnected (Anhang Price et al., 2014). From a cost perspective, this matters. Preventable readmissions, delays in care, and hospital-acquired conditions are among the most expensive failures in healthcare delivery.

When patients understand their care plans, feel respected, and trust their care teams, they are more likely to adhere to treatment and seek care appropriately. The Agency for Healthcare Research and Quality has emphasized that patient-centered communication and engagement reduce unnecessary utilization driven by fear, confusion, and unmet needs (AHRQ, n.d.).

 

Conclusion

The Becker’s analysis is not an indictment of nonprofit or government hospitals, nor a blanket endorsement of for-profit care. It reflects the predictable consequences of different missions, incentives, and accountability structures. For-profit hospitals often appear less expensive because they are designed to enforce financial and operational discipline. Nonprofit and government hospitals absorb the cost of access, education, and public service obligations that markets alone do not reliably support.

The real lesson is not about ownership—it is about leadership. When patient experience is governed with the same rigor as finance and quality, leaders reduce waste, improve outcomes, and protect trust. Cost, quality, and experience are not competing priorities. When aligned through thoughtful leadership, they reinforce one another, sustaining both the humanity of care and the healthcare system itself.

References

Agency for Healthcare Research and Quality. (n.d.). Patient-centered care and communication. https://www.ahrq.gov/cahps/about-cahps/patient-centered-care.html

Anhang Price, R., Elliott, M. N., Zaslavsky, A. M., et al. (2014). Examining the role of patient experience surveys in measuring health care quality. Health Affairs, 33(4), 1–9. https://doi.org/10.1377/hlthaff.2013.0788

Becker’s Hospital Review. (2026, January 22). Hospital care expenses per day: A state-by-state breakdown. https://www.beckershospitalreview.com/finance/hospital-care-expenses-per-day-a-state-by-state-breakdown/

Kaiser Family Foundation. (n.d.). Hospital expenses per adjusted inpatient day. https://www.kff.org/health-costs/state-indicator/expenses-per-inpatient-day/

Medicare Payment Advisory Commission. (2024). Payment basics: Hospital acute inpatient services. https://www.medpac.gov/document/payment-basics-hospital-acute-inpatient-services-payment-system/

Medicare Payment Advisory Commission. (2024). Indirect medical education adjustment. https://www.medpac.gov/document/ime-adjustment/