Related Experiment Videos
Improving financial performance: a study of 50 hospitals
1Ohio State University, Columbus 43201.
Hospital & Health Services Administration
|July 1, 1990
Summary
High-performing hospitals achieve superior financial returns through effective cost control and strategic asset management, not higher prices. They utilize debt cautiously and maintain larger reserves for plant replacement, leading to greater market share.
Area of Science:
- Healthcare Management
- Financial Analysis
- Hospital Administration
Background:
- Hospital financial performance is crucial for operational sustainability and quality of care.
- Understanding the drivers of high performance in hospitals is essential for strategic planning.
Purpose of the Study:
- To identify key financial and operational differences between high-performing and low-performing hospitals.
- To analyze the strategies employed by hospitals to achieve a higher return on equity.
Main Methods:
- Comparative analysis of a small sample of high-performing and low-performing hospitals.
- Performance defined by return on equity.
Main Results:
- High-performing hospitals prioritize cost control over price increases.
- These hospitals minimize investments in plant assets and accounts receivable, often possessing newer facilities.
- They employ debt strategically, using less than low-performing counterparts, and maintain larger reserves for plant replacement.
- Greater market share is also characteristic of high-performing institutions.
Conclusions:
- Effective cost management, efficient asset utilization, and prudent debt management are key to superior hospital financial performance.
- Strategic reserve allocation and market share contribute to sustained profitability and operational stability.