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Related Experiment Videos

When hospitals contract-out their services: collection problems.

R Decker

    Hospital Material[Dollar Sign] Management
    |June 9, 1986
    PubMed
    Summary

    Hospitals facing reduced patient numbers are outsourcing services to manage excess staff and capacity. This strategy, while preserving non-profit status, introduces organizational and financial challenges, particularly in accounts receivable management.

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    Area of Science:

    • Healthcare Management
    • Business Administration

    Background:

    • Hospitals are experiencing reduced bed census, leading to excess personnel and operating capacity.
    • This situation necessitates exploring alternative operational and financial strategies for healthcare facilities.

    Purpose of the Study:

    • To examine the trend of hospitals contracting out services due to reduced operational capacity.
    • To investigate the formation of separate business entities by non-profit hospitals to handle outsourced services.
    • To identify the challenges associated with managing these outsourced activities and their financial implications.

    Main Methods:

    • Analysis of hospital service contracting trends.
    • Examination of organizational structures for managing outsourced hospital functions.
    • Review of financial challenges, including accounts receivable, in service contracting.

    Main Results:

    • Hospitals are outsourcing diverse services like housekeeping, catering, and waste management.
    • Non-profit hospitals are establishing new entities to maintain their tax-exempt status while outsourcing.
    • Significant organizational and accounts receivable collection issues are reported by management.

    Conclusions:

    • Service contracting is a strategy for hospitals to address underutilization.
    • The formation of separate business entities aids in preserving non-profit status.
    • Effective management of outsourced services and receivables is crucial for financial health.

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