Proprietary Hospitals

For-profit (proprietary) hospitals are owned by investors or shareholders and operate to generate financial return. Independent research has documented that for-profits, on average, post higher charges than non-profits for many DRGs, though outcomes vary widely facility-to-facility.

Ownership type captured here is the value reported to CMS during Medicare certification. Several US hospital systems span more than one ownership category through subsidiary structures or joint ventures, so the cohort is best read as a directional signal rather than a strict legal classification. 1069 hospitals fall under proprietary — one of the largest cohorts in the dataset, where aggregates closely track the national hospital population.

Average payments across the proprietary cohort runs above the national Medicare payment baseline, about 13% over the national average. Higher payments often correlate with academic medical centers, denser metros, larger case mixes, and Medicare wage indexes calibrated to higher-cost labor markets.

Independent academic research has documented that average charges, length of stay, and case mix all differ across hospital ownership categories — but those averages mask wide variation within each group. For a planned admission, the more useful number is the hospital-specific Medicare DRG payment in the relevant procedure category, paired with the hospital's CMS Care Compare measures.

Across rated hospitals in the cohort, the average CMS Hospital Compare star rating is 2.6 out of 5. Under the HospitalCostData Value Score, the cohort distributes as 7 A, 115 B, 662 C, 250 D, and 35 F. The Value Score is editorial — it combines payment data with the CMS quality measures and is meant to surface cost-quality interactions, not replace clinical judgment.

For deeper review, the Agency for Healthcare Research and Quality (AHRQ) publishes the Patient Safety Indicators and Inpatient Quality Indicators that feed many CMS measures. Hospital-specific machine-readable rate files are required under the CMS Hospital Price Transparency Rule for non-Medicare benchmarks.