Hospital Practices and Research

Abstract Background: Hospital utilization and financial performance are shaped by payer incentives, managed care participation, and capital investment decisions.
Objectives: This study aims to evaluate the extent to which variations in managed care exposure, capital expenditures, and outpatient revenue are associated with facility-level changes in service volume and net patient revenue over time.
Methods: This study uses a multi-year panel dataset of hospitals observed over 22 quarters from 2020 to 2025. Outcomes include changes in total patient days and net patient revenue, capturing shifts in service volume and realized earnings. Key explanatory variables include capital expenditures, managed care revenue exposure, teaching-related payment adjustments, and outpatient revenue. Hospital fixed-effects models are used to isolate within-hospital variation over time.
Results: Greater managed care revenue exposure and higher capital investment are associated with faster utilization growth but do not consistently produce proportional revenue gains, suggesting margin pressures under certain reimbursement structures. Teaching-related payment adjustments are associated with slower changes in both utilization and revenue.
Conclusion: These findings highlight how payer mix and investment patterns influence provider behavior and operational outcomes. Aligning reimbursement incentives and capital allocation strategies with sustainable utilization and financial stability is important for population health management and delivery system planning.