Healthcare providers and payers

• Bed occupancy

  Occupied bed days divided by available bed days: how full the hospital is.

  Typical: About 72 percent for acute care beds on average across OECD countries (2023); about 85 percent is often treated as a safe maximum, and only Ireland and Canada were above it[7]

• Average length of stay (ALOS)

  The average number of days a patient stays; shorter safe stays let each bed serve more patients. Glossary: Average length of stay (ALOS)

  Typical: About 6.5 days for acute care across OECD countries (2023), from 4.7 in Mexico and Türkiye to 15.7 in Japan[8]

• Payer mix

  The share of revenue from each type of payer (government, insurers, patients paying directly), since each pays a different rate for the same care.

  Typical: Varies by country; in India 39.4 percent of all health spending was paid out of pocket in 2021-22[9]

• ARPOB (average revenue per occupied bed per day)

  Revenue earned for each bed that is filled for a day; Indian hospital chains report it. Glossary: ARPOB (average revenue per occupied bed per day)

  Typical: About INR 78,000 (INR 77,900) at one leading Indian chain in January to March 2026, with occupancy above 75 percent[10]

• Medical loss ratio (MLR)

  Claims paid divided by premiums collected: the share of each premium that goes back out as care. Glossary: Medical loss ratio (MLR)

  Typical: US law sets a minimum of 80 or 85 percent depending on the market; large US insurers reported about 89 to 90 percent in 2025[4]

• PMPM (per member per month)

  Cost or revenue for each insured person each month, the basic unit for insurers and for capitation deals. Glossary: PMPM (per member per month)

• Case mix index

  How complex, and so how costly and well paid, the average patient is compared with a standard.

• Readmission rate

  The share of patients admitted again within a set time, often 30 days; a quality and cost signal.

• Hospital beds per 1,000 people

  How much bed capacity a country has for its population.

  Typical: About 4.2 on average across OECD countries (2023); most countries have 3 to 8, with the lowest in Mexico, Costa Rica and Sweden and about 12.5 in Korea and Japan[7]

• Waiting time

  Time from referral or arrival to treatment; the main outcome public systems are judged on.

1. 1Which country, and who pays: government, social insurance, private insurers or patients?
2. 2How is the client paid: fee for service, DRG, capitation or a fixed budget?
3. 3What is the objective: profit, waiting times, outcomes or cost?
4. 4Which capacity limit binds first: beds, operating theatres, staff or discharge?
5. 5For an insurer: is the problem the price per service or the number of services used per member?

1. 1

   Step 1: Money comes in: taxes, social contributions, premiums and payments out of pocket

   Margin varies

   Taxpayers, workers and employers, and patients paying directly

   Not a business step. In India households paid 39.4 percent of all health spending out of pocket in 2021-22; in the UK most care is free when used.

2. 2

   Step 2: Payers pool the money and the risk

   Thin margin

   Government systems (the NHS, Medicare, PM-JAY), social sickness funds (AOK in Germany) and private insurers (UnitedHealth, Bupa, Tawuniya, Star Health)

   Large US insurers paid out about 89 to 90 percent of premiums as claims in 2025, leaving little for costs and profit.

3. 3

   Step 3: Primary care: family doctors and local clinics

   Margin varies

   GP practices, clinic chains, public health centres

   The first point of contact; under capitation it is paid per person enrolled, not per visit.

4. 4

   Step 4: Hospitals: specialist, emergency and complex care

   Medium margin

   Public hospitals and private chains such as HCA Healthcare, Apollo Hospitals, Max Healthcare, IHH Healthcare and Mediclinic

   US-listed hospital operators average an operating margin of about 13 percent; many public and non-profit hospitals aim only to break even.

5. 5

   Step 5: Diagnostics and pharmacies

   Margin varies

   Laboratories, imaging centres (X-ray, CT, MRI) and pharmacies

   Often high-volume businesses where each test or prescription has a set price.

6. 6

   Step 6: Long-term, rehabilitation and home care

   Thin margin

   Nursing homes, rehabilitation centres, home care agencies

   Staff-heavy and growing as populations age; slow discharge to these services often blocks hospital beds.

Where profit sits depends on who pays and how. Private hospital chains serving insured and self-paying patients, especially in specialist care, earn the best margins; insurers keep only a thin slice after claims; public hospitals and primary care in tax-funded systems are run to budget, not profit. Groups that own both the insurer and the hospitals can capture savings from keeping members healthy.