In pursuit of survival: managing revenues

The changing nature of funding for mental health services has necessitated an increased command of financial management by providers of those services. When services were largely funded by government units, financial management could focus mainly on stewardship concerns. However, in the current environment of competition and mixed governmental and nongovernmental financing, financial management must encompass not only stewardship and the management of costs, but it must also increasingly focus on the management of revenues. This article presents a paradigm for approaching the management of revenues which includes both operating and nonoperating sources of funds. Building on this paradigm, a number of ratios are presented which are designed to aid decision makers in revenue planning as well as in determining the sources of problems when revenue goals are not met.