Hospital average ticket: revenue, supplies and physician fees per patient
When revenue changes, the average ticket tells you whether the hospital saw more patients or whether each encounter was worth more, or less.
The hospital average ticket is the average value per encounter. On its own it is simple; combined with the number of encounters, it explains revenue variance: did the hospital bill more because it saw more patients, or because each encounter was worth more? And when also viewed from the cost side (supplies ticket, physician fee ticket), it shows whether margin per patient is holding up.
The formulas
- Revenue ticket = revenue ÷ number of encounters
- Supplies ticket = supplies and drug cost (or revenue) ÷ number of encounters
- Physician fee ticket = physician fees passed through ÷ number of encounters
Always calculate by encounter type: inpatient, emergency, outpatient and tests have very different tickets, and the overall average changes just because the mix changed.
Volume, price and mix
A month's revenue can be broken down into:
Revenue = number of encounters × average ticket
| Situation | Encounters | Ticket | Reading |
|---|---|---|---|
| Revenue up | Up | Stable | Growth through volume |
| Revenue up | Stable | Up | Higher price, more complex mix or more items per account |
| Revenue stable | Up | Down | More lower-value encounters |
| Revenue down | Stable | Down | Price loss, mix change or accounts not yet billed |
Before concluding that price fell, check for unbilled accounts, which reduce the month's revenue without changing the real ticket. See unbilled accounts.
Revenue ticket versus cost ticket
The revenue ticket alone can mislead. If it rises 5% and the supplies ticket rises 12%, margin per patient is falling. That is why it is worth tracking all three tickets together, by payer and specialty, and linking the reading to contribution margin by payer.
For costs (supplies and physician fees), a higher ticket with the same encounter mix indicates higher consumption per patient, higher purchase prices or changes in physician pay rules. See physician fee management.
Reading caveats
- Define "encounter": an admission, an account, a claim form? The definition changes the number.
- Separate SUS: SUS table values distort the average with private payers.
- Look at the 12-month trend: case mix is seasonal.
The full list of board KPIs is in 15 essential KPIs.
Related questions
Is a high average ticket always good?
Not necessarily. It can rise because the hospital is treating more complex cases, with higher cost too. What matters is margin per encounter.
How do I compare tickets between payers?
By the same encounter type and, ideally, the same procedures. Comparing the overall average ticket of payers with different mixes leads to wrong conclusions.
Should the supplies ticket use cost or revenue?
Both are useful. The cost ticket shows consumption; the revenue ticket, how much was charged. The difference between them is the supplies margin.
Written by the team behind Clic Health: accountants, controllers and developers with more than 20 years of work in hospital management.