The Influence of Ownership on Hospital Financial Performance Strategies PDF Download
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Author: Leslie Eldenburg
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This paper analyzes the effects of hospital ownership on three specific strategies to improve financial performance. These strategies include (1) spending on advertising to increase revenues through increased market share and premium prices; (2) spending on accounting systems to cut costs, increase accounts receivable collections, or increase legitimacy with stakeholders and donors; and (3) improving efficiency through professional administration. We analyze California hospital expenditures on advertising, accounting, and administration for the period 1998 to 2000 to determine differences in these strategies across ownership type. We also examine the relationships among these expenditures and revenues and excess income margins. We find differences in strategies by ownership, i.e., for-profit hospitals emphasize advertising whereas government hospitals emphasize accounting. We also find that expenditures on advertising, accounting, and administration are positively related to margins for some hospitals.
Author: Leslie Eldenburg
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper analyzes the effects of hospital ownership on three specific strategies to improve financial performance. These strategies include (1) spending on advertising to increase revenues through increased market share and premium prices; (2) spending on accounting systems to cut costs, increase accounts receivable collections, or increase legitimacy with stakeholders and donors; and (3) improving efficiency through professional administration. We analyze California hospital expenditures on advertising, accounting, and administration for the period 1998 to 2000 to determine differences in these strategies across ownership type. We also examine the relationships among these expenditures and revenues and excess income margins. We find differences in strategies by ownership, i.e., for-profit hospitals emphasize advertising whereas government hospitals emphasize accounting. We also find that expenditures on advertising, accounting, and administration are positively related to margins for some hospitals.
Author: Kathryn J. Chang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper empirically examines the influence of ownership on strategic cost management (SCM) and related performance consequences in the health care industry. The concept of SCM is proposed as a two-dimensional strategy construct: revenue enhancement and cost reduction. Revenue enhancement refers to the use of SCM instruments to improve the quality of current revenue streams and identify revenue growth opportunities, whereas cost reduction refers to the use of SCM instruments to identify operational inefficiencies and contain costs. Drawing upon property rights theory and prior accounting literature, we develop the hypotheses that predict the ownership type would affect the extent to which the hospital strategically manages revenues and costs of operation, leading to possible improvement in financial performance. We select certain performance measures that are commonly used in accounting and healthcare research to operationalize the extensive use of SCM revenue-enhancing and SCM cost reduction strategies. A two-stage analysis approach is employed to address potential endogenity issues commonly associated with the relationship between ownership and performance in accounting research (Larcker and Rusticus 2010). Using a sample from short-term general, acute care hospitals in the State of California, we find that the ownership type does play a significant role in the choice of SCM strategies along the dimension of revenue-enhancing and cost reduction across different types of hospitals. Moreover, there is strong evidence that the association between the extensive use of SCM strategies and hospital financial performance is a function of the “match” between SCM use and a hospital's ownership type, operating characteristics, and market environment.
Author: Institute of Medicine
Publisher: National Academies Press
ISBN: 0309036437
Category : Medical
Languages : en
Pages : 580
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Book Description
"[This book is] the most authoritative assessment of the advantages and disadvantages of recent trends toward the commercialization of health care," says Robert Pear of The New York Times. This major study by the Institute of Medicine examines virtually all aspects of for-profit health care in the United States, including the quality and availability of health care, the cost of medical care, access to financial capital, implications for education and research, and the fiduciary role of the physician. In addition to the report, the book contains 15 papers by experts in the field of for-profit health care covering a broad range of topicsâ€"from trends in the growth of major investor-owned hospital companies to the ethical issues in for-profit health care. "The report makes a lasting contribution to the health policy literature." â€"Journal of Health Politics, Policy and Law.
Author: Kathryn J. Chang
Publisher:
ISBN:
Category :
Languages : en
Pages : 180
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Book Description
In this dissertation, I attempt to study the equilibrium behaviors of for-profit and nonprofit hospitals in a monopolistic competitive market, and to empirically test whether there is a measurable difference in board governance practices and strategic cost management approach across hospital ownership types. Chapter 1 offers a brief introduction to three manuscripts that analytically and empirically examine the relationship between ownership forms and hospital behaviors pertaining to board governance and strategic cost management. Chapter 2 develops a theoretical model to explain the equilibrium behavior and outcome of nonprofit hospitals as compared to for-profit hospitals in a monopolistic competitive market. I find that nonprofit hospitals tend to maximize quantity of services by offering a broad range of services at relatively low prices, irrespective of the ability of these hospitals to obtain additional funds and the size of the subsidy. However, subsidized hospitals are able to further lower price to attract more patients but still manage to break even. Moreover, nonprofit hospitals are relatively more efficient by maximizing economic welfare (the sum of consumer surplus and producer surplus) and operating at economies of scale. Such finding contradicts the conventional view that for-profit is a more efficient type of ownership form (Clarkson, 1972; Clark, 1980; Cutler and Horwitz, 2000) but is consistent with empirical findings that predominantly favor nonprofit hospitals (Rosenau 2003; Rosenau and Linder 2003; Schlesinger and Gray 2006). Therefore, this paper provides theoretical explanation for the performance paradox of nonprofit hospital. Three propositions derived from the model can be further developed into testable hypotheses for future empirical research. Chapter 3 empirically investigates the relationship between board / CEO turnover and hospital performance, as well as the incremental effects of ownership type on hospital board governance practices. It develops the hypotheses that claim the substandard performance increases board / CEO turnover and the propensity of boards using certain performance measures is different between for-profit and nonprofit hospitals. Departing from prior studies, this paper applies factor analysis to examine the usefulness of multiple financial and nonfinancial performance measures in estimating the determinants and factors leading to board / CEO turnover. Using a sample from California short-term general, acute care hospitals, I find that multiple financial and nonfinancial performance measures are useful accounting signals of board governance practices. Moreover, the sensitivity of boards toward certain performance measures is affected by hospital ownership status only in the CEO replacement decision. Chapter 4 empirically examines the influence of ownership on strategic cost management (SCM) and its performance consequences in the health care industry. Drawing upon the property rights theory and prior accounting literature, it develops the hypotheses that predict the ownership type would affect the extent to which the hospital strategically manages revenues and costs of operation, leading to improvement in financial performance. The results suggest that the ownership type does play a significant role in the choice of SCM strategies along the dimension of revenue-enhancing and cost reduction across a sample of U.S. hospitals. Moreover, there is strong evidence that the association between the extensive use of SCM strategy and hospital financial performance is a function of the "match" between SCM use and a hospital's ownership type, operating characteristic and market environment.
Author: M. Z. Younis
Publisher: LAP Lambert Academic Publishing
ISBN: 9783838300818
Category :
Languages : en
Pages : 136
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Book Description
Hospital services comprise the largest share of health care expenditures. Studying hospital economic and financial performance is essential as a means of containing health care cost and maintaining hospital solvency. Hospital economic and financial performance can be examined based on the type of ownership (e.g., for-profit, not-for-profit, and the conversion of hospitals from non-profit ownership to for-profit status). This book presents a comprehensive analysis of the relationship between hospital ownership, location, and other economic and non economic factors that influence hospital performance and utilization. The book provides a useful guide for hospital managers and executives, investment bankers, legislators, and policy makers. The book is recommended as a supplementary text for undergraduate and graduate courses in health economics and finance, as well as for health policy and international health
Author:
Publisher:
ISBN:
Category : Economics
Languages : en
Pages :
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Author: David Edward Marcinko
Publisher: CRC Press
ISBN: 1466558741
Category : Business & Economics
Languages : en
Pages : 350
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Book Description
In this book, a world-class editorial advisory board and an independent team of contributors draw on their experience in operations, leadership, and Lean managerial decision making to share helpful insights on the valuation of hospitals in today‘s changing reimbursement and regulatory environments.Using language that is easy to understand, Financia
Author: Inmaculada Aguiar-Díaz
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Ownership of hospitals matters with respect to financial performance, but the literature on this topic is scarce and largely focussed on for-profit versus non-for-profit hospitals. In contrast, this paper focusses on the for-profit hospital and, specifically, on the insurance companies as hospital dominant shareholders with respect to other types of shareholders. Arguments from the ownership and strategic management literatures are used from a theoretical point of view. Specifically, this paper analyses empirically the effects of insurance companies as controlling shareholders on the financial performance of unlisted, private, for-profit hospitals (179) in Spain from 2005 to 2012. The results show that the hospitals with insurance companies as controlling shareholders are less profitable and have a lower operating margin than do those controlled by banks, firms, or individuals/families. The lower performance might be explained by rent seeking by insurance companies as dominant shareholders because they could apply pressure to reduce the prices of the services provided by the hospitals to the insurers.
Author: Yu-Chu Shen
Publisher:
ISBN:
Category : Hospitals
Languages : en
Pages : 0
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Book Description
We apply meta-analytic methods to conduct a quantitative review of the empirical literature since 1990 comparing financial performance of US for-profit, not-for-profit, and government-owned general acute hospitals. We find that the diverse results in the hospital ownership literature can be explained largely by differences in authors' underlying theoretical frameworks, assumptions about the functional form of the dependent variables, and model specifications. Weaker methods and functional forms tend to predict larger differences in financial performance between not-for-profits and for-profits. The combined estimates across studies suggest little difference in cost among all three types of hospital ownership, and that for-profit hospitals generate more revenue and greater profits than not-for-profit hospitals, although the difference is only of modest economic significance. There is little difference in revenue or profits between government and not-for-profit hospitals.
Author: Steve Richard Andersen
Publisher:
ISBN:
Category : Nonprofit organizations
Languages : en
Pages : 232
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