A financial model for assessing hospital performance: an application to multi-institutional organizations.
The financial growth of investor-owned and not-for-profit hospitals has become an increasingly important research topic. More hospitals are forming multi-institutional organizations (MIOs) in an attempt to achieve greater market share and improve financial self-sufficiency. Few studies have provided a model for systematically analyzing financial growth in MIOs. A financial model is presented here to analyze equity growth. The model is applied to MIOs using recent audited financial data from more than 500 hospitals in 18 MIOs, eight investor-owned and ten not-for-profit. The results indicate that investor-owned MIO hospitals achieve significantly greater equity growth primarily through greater profit margins. The implications of these findings are discussed relative to the increasing price-competitive healthcare environment. The usefulness of the financial model is assessed in terms of its value as a financial diagnostic tool.
D005376:Financial Management / Q000379:methods*; D005377:Financial Management, Hospital / Q000379:methods*; D006777:Hospitals, Proprietary / Q000191:economics; D006788:Hospitals, Voluntary / Q000191:economics; D007182:Income; D007449:Investments; D008962:Models, Theoretical; D009096:Multi-Institutional Systems / Q000191:economics*; D014481:United States