Despite the government support that most rural hospitals receive, a larger share of rural hospitals had negative operating margins than did urban hospitals in 2023 (44% versus 35%) (Figure 4). A larger share of rural hospitals in areas that were not adjacent to a metropolitan area (i.e., that were in the most rural areas) had negative margins than did rural hospitals in areas adjacent to a metropolitan area (49% versus 40%). Operating margins reflect profit margins earned on patient care and other operating activities, rather than profits earned on other sources, such as investments. Hospitals in rural areas and elsewhere have raised concerns about the growth of Medicare Advantage, pointing to payment delays and denials and lower reimbursement than traditional Medicare. According to the American Hospital Association, Medicare Advantage reimburses rural hospitals at lower rates than traditional Medicare on average.
(The Sheps Center has a broader definition of “rural” than used in this brief, such as by including critical access hospitals in metropolitan areas). Decreases in Medicaid spending could accelerate the closure of obstetrics service lines in rural hospitals, in addition to affecting the availability of services at rural hospitals more generally. From 2010 to 2022, 238 rural hospitals closed obstetrics units while only 26 hospitals opened new units. Low Medicaid reimbursement rates and difficulty recruiting and retaining providers were cited as the biggest challenges to providing obstetrics care in rural areas, according to the Government Accountability Office. For example, about half of rural hospitals provide obstetrics care (53%), intensive medical and surgical care (50%), and care through a certified trauma center (52%).
Many state Medicaid programs also have special payment rules for hospitals in rural areas, such as by paying higher rates or based on costs or through supplemental payments. HRSA also administers several programs providing grants, technical support, workforce development, and other assistance to rural hospitals and rural providers more generally. OMB defines Core Based Statistical Areas (CBSAs), which include metropolitan and micropolitan areas. A metropolitan area is a county or group of counties that contains at least one urban area (as defined by the Census) with a population of 50,000 or more people. A micropolitan area is a county or group of counties that contains at least one urban area with a population of at least 10,000 but less than 50,000. This brief defines “rural” as nonmetropolitan, as do many researchers and MedPAC, though OMB itself does not do so.
To lower your landed cost without jeopardizing service quality, check out Ship4wrd. Let’s say that a company imports 500 units of a product define expense from Thailand to the United States at $20 per unit. In addition, insurance is $300 with an additional $20 per customer order ($20.60/item). Calculating landed cost can help you determine which distribution center to ship from.
- Expense management is a crucial aspect of both personal and corporate financial well-being.
- Operating expenses are the expenses related to a company’s main activities, such as the cost of goods sold, administrative fees, office supplies, direct labor, and rent.
- Expenses paid to preserve one’s reputation do not appear to qualify).5 In addition, it must be (3) paid or incurred during the taxable year.
- Closures may be especially problematic for people who have difficulty traveling long distances and for people with time-sensitive conditions, such as heart attacks and childbirth.
- A smaller share of critical access hospitals (40%) and rural referral centers (37%) reported negative margins in 2023 than hospitals in other designated categories, such as sole community hospitals.
Non-Operating Expenses
For example, paying less on advertising reduces costs, but it also lowers the company’s visibility and ability to reach out to potential customers. Medicare covered a larger share of discharges in rural versus urban areas (53% versus 45%) while Medicaid covered a similar share (19% versus 21%) and private insurance (not including Medicare and Medicaid plans) covered a smaller share (19% versus 24%). Private insurers generally reimburse at higher rates than Medicare and Medicaid. Evidently, landed costs are crucial for every business importing or exporting goods.
Your bill explained: When to expect hotel charges on your card
The right tools let you focus on getting your team where they need to go—not sorting through a mountain of paper receipts and approvals. This part of the policy should outline if travel arrangements require pre-approval or if employees have discretion over their own budgets. If management provides employees with a company credit card, they’ll generally set strict guidelines and limits on what it can be used to pay for.
Port/Airport Charges
From 2017 to 2024, 62 rural hospitals closed compared to 10 that opened, a net reduction of 52 hospitals. (Closures refer to hospitals that eliminate inpatient services—aside from those that convert to rural emergency hospitals—or cease operations altogether). Over the longer twenty-year period from 2005 to 2024, 193 rural hospitals closed according to the UNC Sheps Center (which uses a broader definition of “rural” than this brief). The small number of studies that have evaluated the association between consolidation with rural hospital closures and service eliminations have had mixed results. About two thirds (69%) of the rural hospital closures from 2014 to 2024 occurred in states that had not expanded Medicaid at the time according to KFF analysis of data from the UNC Sheps Center.
- These costs go on top of the initial price and accumulate as products move along the supply chain.
- Medicare covered a larger share of discharges in rural versus urban areas (53% versus 45%) while Medicaid covered a similar share (19% versus 21%) and private insurance (not including Medicare and Medicaid plans) covered a smaller share (19% versus 24%).
- An expense report is a form of document that contains all the expenses that an individual has incurred as a result of the business operation.
- It keeps your records tidy and ensures you maximize your travel and expense budgets.
By tracking and categorizing expenses, individuals gain a clear understanding of where their money is going. It empowers individuals to make informed choices about their spending habits, prioritize financial goals, and avoid unnecessary debt. There are outstanding mobile applications that makes personal expense management handy, notably SMoney that are available in both iOS and Android Versions. Section 162(a) of the Internal Revenue Code is the deduction provision for business or trade expenses.4 In order to be a trade or business expense and qualify for a deduction, it must satisfy 5 elements in addition to qualifying as an expense. It must be (1) ordinary and (2) necessary (Welch v. Helvering defines this as necessary for the development of the business at least in that they were appropriate and helpful).
Many rural areas also have a particularly hard time attracting and retaining health care workers. Both urban and rural hospitals have encountered financial challenges since the start of the COVID-19 pandemic, including rising labor and supply costs, although there are signs that hospital finances have been recovering. The analysis of the share of rural hospitals with special payment designations focused on non-federal general short-term and rural emergency hospitals (excluding those in U.S territories), which included 1,787 hospitals in 2023. Also being discussed are site-neutral payment reforms that would achieve Medicare savings by aligning Medicare payment rates for a given outpatient service across different sites of care. These reforms would reduce payments to hospitals, with the impact varying based on the extent to which a given hospital relies on Medicare outpatient revenues and other factors. MedPAC estimated that one approach applying to on- and off-campus hospital outpatient departments (HOPDs) would lead to relatively large decreases in Medicare revenues for smaller and rural hospitals.
Customs Duties & Taxes
Other federal programs or policies also provide additional support for rural hospitals. For instance, Medicare adjusts IPPS and OPPS reimbursements based on the wages hospitals pay in a given area (known as the Wage Index), which generally results in lower reimbursement for rural hospitals. However, sole community hospitals and rural referral centers can be more easily reclassified to areas that receive higher reimbursements through the Wage Index.
While most costs of doing business can be expensed or written off against business income the year they are incurred, capital expenses must be capitalized or written off slowly over time. Over two fifths (44%) of rural hospitals were in areas that are not adjacent to metropolitan areas. These hospitals represented 3% of all hospital discharges and operated in 43 states. Fifteen million people lived in rural areas not adjacent to a metro area in 2023 compared to 31 million in rural adjacent areas.
Although rural hospitals more frequently have negative operating margins than urban hospitals, more than half had positive operating margins in 2023 (the most recent year of data available), and nearly one fifth (19%) had margins of at least 10%. Rural hospitals in states that have not adopted the Affordable Care Act (ACA) Medicaid expansion were more likely to have negative margins than rural hospitals in expansion states. Among rural hospitals, negative margins were more common among those in the most rural areas, while positive margins were more common among those that had more beds, higher occupancy, were affiliated with a health system, and were not government-owned in 2023. Analyses of hospital margins relied primarily on RAND Hospital Data and focused on non-federal general short-term hospitals, excluding those in U.S territories. Those analyses also included other sample restrictions, such as ignoring certain outlier values.
Risk refers to the cost of protecting your investment – be it compliance, quality assurance, or insurance. Finally, overhead includes costs like currency conversion and payment processing charges. Employees need to know the rules for the booking phase of their travel plans. Company policy might require business travelers to work with a specific travel agency or booking platform that offers better rates or has the flexibility to book with their preferred airlines, hotel chains, and car rental services.
In double-entry bookkeeping, expenses are recorded as a debit to an expense account (an income statement account) and a credit to either an asset account or a liability account, which are balance sheet accounts. Typical business expenses include salaries, utilities, depreciation of capital assets, and interest expense for loans. The purchase of a capital asset such as a building or equipment is not an expense. To create a budget that works, start by identifying how much of your income goes toward fixed expenses.
It keeps your records tidy and ensures you maximize your travel and expense budgets. Clear, defined guidelines make it easier to organize expense reports, track business travel costs, and identify what incurred costs can be reimbursed or deducted. The IRS has specific guidelines about what is and isn’t a justifiable business travel expense. For example, transportation and lodging for business-related activities are business expenses, but lavish gifts for colleagues aren’t. This means that clear expense report guidelines, accounting practices, and documentation are essential to minimize errors. On a personal level, expense management enables individuals to maintain a healthy financial life.
Guide to paying for business travel
There were 1,796 community hospitals in rural areas in 2023, representing 92% of all hospitals in rural areas. State Medicaid expansion under the Affordable Care Act has had financial benefits for hospitals according to several studies. The financial impact of Medicaid expansion for at least certain measures may be most evident among rural hospitals, small hospitals, and hospitals that see a higher proportion of low-income patients, based on some of this research. These costs fluctuate based on usage, lifestyle choices, and unexpected needs.
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In other words, financial conditions as measured by operating margins varied substantially across rural hospitals. With Medicaid covering about one fifth of discharges in rural areas, any substantial reduction in Medicaid spending could have a large impact on rural hospital finances, particularly given the lower margins of rural hospitals. In addition to providing primary coverage for many patients, Medicaid also provides secondary coverage for many beneficiaries who are dually enrolled in Medicare.