Definition of Selected Indicators

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Margin Before Extraordinary Items
Total Operating Revenue
Net Income From Operations
Operating Margin
Total Markup
Markup Percent
Charity Care & Bad Debt At Cost

Margin Before Extraordinary Items
The Margin Before Extraordinary Items is calculated as the difference between total revenues and total expenses, divided by total revenues. It is a measure of the overall profitability of a hospital and reflects the inclusion of philanthropic contributions, endowment income, investment income, and other revenue and expense items not related to operations. The formula used is:

(Excess of revenues over expenses/(Total operating Revenue + Total nonoperating revenue)) * 100
Extraordinary gains and losses, as well as other nonrecurring and unusual items, are excluded in calculating the margin before extraordinary items.

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Total Operating Revenue
Total Operating Revenue consists of:

Net Income From Operations
Net Income From Operations is the mathematical difference between Total operating revenue and Total operating expenses.

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Operating Margin
The Operating Margin reflects the proportion of operating revenue (after allowances) retained as income, and is a measure of a hospital's profitability from the provision of patient care services, nonpatient care services to patients, sales and activities to persons other than patients, and other normal day-to-day activities. The operating margin is a measure of a hospital's profitability from patient care services and other hospital operations, and is calculated as follows:
(Income from operations/Total operating revenue) * 100

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Total Markup
The Total Markup (also known as Total Margin) is the Net Income divided by the sum of Total Operating Revenue, Nonoperating Gains & Losses, and Extraordinary & Other Nonrecurring Items. The formula is:
(Net Income/(Total Oper Rev + Nonoper Gains & Losses + Extraord & Other NonRecrg Itms)) * 100

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Markup Percent
Markup Percent is the Total Gross Patient Revenue divided by Operating Expenses, & that total minus 1 and multiplied by 100. The formula is:
((Total Gross Patient Revenue/Operating Expenses) -1) * 100

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Charity Care & Bad Debt At Cost
Charity Care and Bad Debt At Cost is Charity Care plus Bad Debt times Operating Expense divided by the sum of Gross Patient Revenue & Other Revenue. The formula is:
((Charity Care + Bad Debt) x Operating Expenses)/(Gross Patient Revenue + Other Revenue)

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