Financial standards for HMOs.
In today's health care environment, it is important to assess the liquidity and profitability performance of HMOs. This study focuses on three liquidity ratios and three profitability ratios derived from national databases of between 740 and 776 HMOs from 1996 to 1999. Most of the HMOs appear to be using more debt and are less liquid now than they were in 1995. Since administrative overhead costs and dollars spent on medical costs have been increasing, HMOs' margins have been consistently negative. A more careful analysis of overhead costs and the cost of the delivery of medical services could result in improved HMO quality of care, efficiencies, and a return to positive profit margins.
Parsons
Robert J
RJ
Romney Institute of Public Management, Marriott School, Provo, Utah, USA.
Gustafson
Gary
G
Nelson
Ray D
RD
Murray
Bruce P
BP
Dwore
Richard B
RB
D000067:Accounts Payable and Receivable; D003625:Data Collection; D003627:Data Interpretation, Statistical; D005375:Financial Audit / Q000706:statistics & numerical data*; D020793:Gatekeeping; D006279:Health Maintenance Organizations / Q000191:economics* / Q000639:trends; D006297:Health Services Accessibility; D007182:Income / Q000706:statistics & numerical data* / Q000639:trends; D017146:Models, Organizational; D010067:Ownership; D013660:Taxes; D014481:United States