Payer mix and hospital revenue
Revenue by payer, self-pay concessions, net revenue.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: payer mix and hospital revenue.Updated 4 November 2026
Part of healthcare financial models, with the models, labs and guides around it.
What it does
Who pays decides what an admission is worth. Each payer’s share of admissions and visits times its revenue per admission gives inpatient and outpatient revenue by payer; commercial insurers negotiate the highest rates, Medicare pays set rates by diagnosis group, Medicaid pays least, and self-pay patients are billed in full but mostly do not pay. The share not expected to be collected is an implicit price concession deducted from revenue. Net revenue per adjusted admission is the price measure an analyst tracks, and a drift towards government payers lowers it with no change in the work done.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 20–37: Commercial share of admissions, FY0, Medicare share of admissions, FY0, Medicaid share of admissions, FY0, Commercial share moved to government payers, base…
- Revenue, rows 6–10: Commercial share moved to government payers, cumulative, Commercial, Medicare, Medicaid…
- Revenue, rows 13–16: Commercial, Medicare, Medicaid, Self-pay
- Revenue, rows 19–23: Commercial, Medicare, Medicaid, Self-pay…
- Revenue, rows 26–30: Commercial, Medicare, Medicaid, Self-pay…
- Revenue, rows 33–41: Patient revenue before price concessions, Less: implicit price concessions on self-pay, Net revenue, Net revenue growth…
What a reviewer looks for
- One blended rate for every payer.
- Self-pay at full charges in revenue.
- Commercial rate growth applied to Medicare and Medicaid.
Learn it, then build it
Vocabulary: EBITDA.