Rising medical costs is a real and imminent problem; as a major health care services provider, Medicare covers nearly 16% of the U.S. population. This paper aims to investigate factors that a ect the cost and quality of acute care hospitals reim- bursed by Medicare. Multiple datasets from the Center for Medicare and Medicaid Services and IRS were merged to evaluate the e ect of hospital ownership and local socioeconomic levels on hospital performance, based on three main quality metrics: average cost per bene ciary, 30-day readmission rate, and hospital acquired conditions (HAC) score. Both variables were found to have statistically signi cant e ects. In addition, the results showed that CMS policy may have unfairly penalized hospitals serving more vulnerable populations, by using a metric that did not consider hospital location in lower income neighborhoods.