Relationship between profitability and financial factors of hospitals after a period of austerity and health care reforms: evidence from Greece.

PURPOSE: The reduction of government expenditure in the healthcare system, the difficulty of finding new sources of funding and the reduction in disposable income per capita are the most important problems of the healthcare system in Greece over the last decade. Therefore, studying the profitability of health structures is a crucial factor in making decisions about their solvency and corporate sustainability. The aim of this study is to investigate the effect of economic liquidity, debt and business size on profitability for the Greek general hospitals (GHs) during the period 2016-2018. DESIGN/METHODOLOGY/APPROACH: Financial statements (balance sheets and income statements) of 84 general hospitals (GHs), 52 public and 32 private, over a three-year period (2016-2018), were analyzed. Spearman's Rs correlation was carried out on two samples. FINDINGS: The results revealed that there is a positive relationship between the investigated determinants (liquidity, size) and profitability for both public and private GHs. It was also shown that debt has a negative effect on profitability only for private GHs. PRACTICAL IMPLICATIONS: Increasing the turnover of private hospitals through interventions such as expanding private health insurance and adopting modern financial management techniques in public hospitals would have a positive effect both on profitability and the efficient use of limited resources. ORIGINALITY/VALUE: These results, in conjunction with the findings of the low profitability of private hospitals and the excess liquidity of public hospitals, can shape the appropriate framework to guide hospital administrators and government policymakers.

Ruta del Paciente en urgencias para una gestión clínica efectiva

Esta herramienta virtual permite desarrollar un proceso de autogestión y planeación de la oferta de servicios para la atención de urgencias y encontrará todas las variables que pueden llegar a modificar el resultado de la calidad de la atención.

Non-operating revenue is an important source of funding for rural hospitals, especially those that are government-owned.

PURPOSE: Non-operating revenue (NOR), derived from investments, contributions, government appropriations, and medical space rentals, can contribute to financial stability of hospitals by offsetting operating losses and improving profitability. NOR might benefit rural hospitals that often face intense financial pressures. However, little is known about how much rural hospitals rely on NOR and if certain organizational characteristics are associated with differences in NOR. METHODS: Healthcare Cost Report Information System data from 2011 to 2019 were used to analyze sources of revenue among Critical Access Hospitals (CAHs) and Rural Prospective Payment System (R-PPS) hospitals through descriptive statistics and regression models. Reliance on NOR was measured by the percentage of total revenue from non-operating sources. FINDINGS: Results indicate that both CAHs and R-PPS hospitals rely on NOR; however, CAHs have a higher percentage of total revenue derived from non-operating sources (3.2%) as compared to R-PPS hospitals (1.9%) (p < 0.001). Government-owned hospitals have significantly higher reliance on NOR than other ownership types. System affiliation also influences reliance on NOR. Lastly, results suggest that NOR may play a role in improving overall profit margins. CONCLUSIONS: As rural hospitals disproportionately face challenges related to declining profitability and the risk for closure, they may rely on NOR to continue to strengthen financial performance and provide health care to their communities. However, NOR is not guaranteed, and reliance on NOR further reiterates the value of stable, adequate reimbursement to guard against fluctuations in NOR.

Climate, race, and the cost of capital in the municipal bond market.

Both climate risk and race are factors that may affect municipal bond yields, yet each has received relatively limited empirical research attention. We analyzed > 712,000 municipal bonds representing nearly 2 trillion USD in par outstanding, focusing on credit spread or the difference between a debt issuer's interest cost to borrow and a benchmark "risk-free" municipal rate. The relationship between credit spread and physical climate risk is significant and slightly positive, yet the coefficient indicates no meaningful spread penalty for increased physical climate risk. We also find that racial composition (the percent of a community that is Black) explains a statistically significant and meaningful portion of municipal credit spreads, even after controlling for a variety of variables in domains such as geographic location of issuer, bond structure (e.g., bond maturity), credit rating, and non-race economic variables (e.g., per capita income). Assuming 4 trillion USD in annual outstanding par across the entire municipal market, and weighting each issuer by its percent Black, an estimated 19 basis point (bp) penalty for Black Americans sums to approximately 900 million USD annually in aggregate. Our combined findings indicate a systemic mispricing of risk in the municipal bond market, where race impacts the cost of capital, and climate does not.

Why enterprise resource planning initiatives do succeed in the long run: A case-based causal network.

Despite remarkable academic efforts, why Enterprise Resource Planning (ERP) post-implementation success occurs still remains elusive. A reason for this shortage may be the insufficient addressing of an ERP-specific interior boundary condition, i.e., the multi-stakeholder perspective, in explaining this phenomenon. This issue may entail a gap between how ERP success is supposed to occur and how ERP success may actually occur, leading to theoretical inconsistency when investigating its causal roots. Through a case-based, inductive approach, this manuscript presents an ERP success causal network that embeds the overlooked boundary condition and offers a theoretical explanation of why the most relevant observed causal relationships may occur. The results provide a deeper understanding of the ERP success causal mechanisms and informative managerial suggestions to steer ERP initiatives towards long-haul success.

Determinants of financial distress in the European air transport industry: The moderating effect of being a flag-carrier.

Due to the COVID-induced global collapse in demand for air travel, the year 2020 was a catastrophic one for the aviation industry. A dramatic drop in operating revenues along with continuing fixed expenses drained the cash reserves of airlines, with consequent risks of financial distress and, potentially, even of bankruptcy. Flag-carriers are a special group in the airline business-they are considered to have privileges in terms of the support given by governments while, on the other hand, are often viewed as having low efficiency and performance. This study aims to estimate for European airlines the interaction effect of being a flag-carrier (flagship) with the relationship between leverage, liquidity, profitability, and the degree of financial distress. Findings obtained from analysing 99 European airlines over a period of ten years, indicate that the negative influence of leverage on financial stability is higher in the case of flag carriers (flagship). The impact of liquidity and profitability on financial health is more positive for flagship than for non-flagship carriers. These findings are not limited to contributing to the existing literature, but also have significant practical implications for executives, managers, and policy makers in the European air transport sector.

Financial liquidity and profitability of polish self-governing public health care institutions for the years 2016-2018.

Currently, Polish therapeutic entities are forced to operate in an extremely turbulent environment and pursue two main goals: economic and social. The aim of this article is to diagnose the relationship between profitability and financial liquidity in Polish self-government health care institutions by assessing basic indicators of financial liquidity and profitability. The scope of work covered 1017 self-government independent health care institutions, which systematically published their financial statements for 2016-2018. The subject of the study was to analyze the relationship between the levels of profitability and financial liquidity ratios. The study used statistical and tabular-descriptive methods. On the basis of the obtained results it can be stated that the relation between the return on sales, return on equity and return on assets and liquidity (current, fast and immediate) was positive and the strength of this relation was strong and statistically significant. There was a statistically significant negative correlation between short-term liabilities and the return on sales, assets and equity. The cash conversion cycle has a significant positive impact on profitability (and vice versa). CONCLUSION. Entities that had higher profitability also had a higher degree of liquidity. They were also more efficient in inventory management and paid their liabilities faster. Summarizing the results of the study, it can be concluded that those entities that had higher profitability also had a higher degree of liquidity. They were also more efficient in inventory management and paid their liabilities faster.

Trends in Hospital Lawsuits Filed Against Patients for Unpaid Bills Following Published Research About This Activity.

Importance: Suing patients and garnishing their wages for unpaid medical bills can be a predatory form of financial activity that may be inconsistent with the mission of a hospital. Many hospitals in the state of Virginia were discovered to be suing patients for unpaid medical bills, as first presented in a 2019 research article that launched 2.5 months of media attention on hospital billing practices and a grassroots public demand for hospitals to stop the practice. Objective: To evaluate the association of a research publication and subsequent media coverage with the number of hospital lawsuits filed against patients for unpaid medical bills. Design, Setting, and Participants: This cross-sectional study of Virginia hospitals that sued patients for unpaid medical bills used an interrupted time series analysis. Data on hospitals suing patients for unpaid medical bills were collected during a preintervention period (June 25, 2018, to June 24, 2019), an intervention period (June 25, 2019, to September 10, 2019), and a postintervention period (September 11, 2019, to September 10, 2020). Exposures: Publication of a research article and subsequent media coverage. Main Outcomes and Measures: The total number of warrant in debt and wage garnishment lawsuits filed by Virginia hospitals and the frequency of those lawsuits filed before, during, and after the intervention period on a weekly basis. Results: A total of 50 387 lawsuits, filed by 67 Virginia hospitals, were included; 33 204 (65.9%) were warrant in debt lawsuits, and 17 183 (34.1%) were wage garnishment lawsuits. From the preintervention period to the postintervention period, there was a 59% decrease in the number of lawsuits filed (from 30 760 lawsuits to 12 510 lawsuits), a 55% decrease in the number of warrant in debt cases filed (from 19 329 to 8651), a 66% decrease in the number of wage garnishments filed (from 11 431 to 3859), and a 64% decrease in the dollar amount pursued in court (from $38 700 209 to $13 960 300). During the study period, 11 hospitals banned the practice of suing patients for unpaid medical bills. The interrupted time series analysis showed a significant decrease of 5% (incidence rate ratio, 0.95; 95% CI, 0.94-0.96) in the total weekly number of lawsuits in the postintervention period. Conclusions and Relevance: The findings of this study suggest that research leading to public awareness can shift hospital billing practices.

The Finances of Neurology in a Major Children's Hospital.

Child neurology programs can be net margin generators for children's hospitals. The relative value unit (RVU) expectations for child neurologists are heavily influenced by proceduralists (neurophysiologists, Botox injectors, and so forth) and means in most RVU data sets are not realistic expectations for Evaluation and Management coding, outpatient neurologists. Yet each neurologist has a net revenue/expense ratio of 1.97 for a hospital neurology enterprise, so each of the neurologists generates nearly twice their salary for the hospital. Downstream revenue is even more impressive. Each neurologist generates about $2,000,000.00 in downstream revenue per year.

Assessment of the Financial Health of Rural Hospitals After Implementation of the Georgia Rural Hospital Tax Credit Program.

Importance: In 2016, Georgia implemented the Rural Hospital Tax Credit Program, which allows taxpayers to receive a tax credit for contributions to qualifying rural hospitals in the state. Empirical evidence of the program's association with the viability of the state's rural hospitals is needed. Objective: To examine the association of the tax credit program with the financial health of participating rural hospitals. Design, Setting, and Participants: This longitudinal cross-sectional study used hospital financial data from the Centers for Medicare & Medicaid Services for 2015 to 2019. A difference-in-differences analytic approach was used to examine the association of the tax credit program with rural hospital financial health. Study participants included Georgia rural hospitals eligible to participate in the program. Comparison hospitals were selected from the southern states of Alabama, Florida, Mississippi, North Carolina, South Carolina, and Tennessee. Exposures: Hospital participation in the Georgia Rural Hospital Tax Credit Program. Main Outcomes and Measures: The primary outcome of the study was financial health measured with total margin, days cash on hand, debt-asset ratio, and average age of plant as well as a Financial Strength Index (FSI), which combined the previous measures to assess overall financial strength. Results: The analytical sample included a balanced panel of 136 hospitals, with 47 Georgia Rural Hospital Tax Credit Program participants (18 [38%] critical access hospitals; 5 [11%] system affiliated; mean [SD] bed count, 60 [47]; mean [SD] Medicare inpatient mix, 52% [16]) and 89 comparison hospitals (43 [48%] critical access hospitals; 24 [27%] system affiliated; mean [SD] bed count, 52 [41]; mean [SD] Medicare inpatient mix, 67% [18]). Two years after implementation, program participation was associated with a 23% increased probability of good or excellent financial health (b = 0.23; 95% CI, 0.10-0.37; P < .001) and a 6.7-point increase in total margin (b = 6.67; 95% CI, 3.61-9.73; P < .001). Conclusions and Relevance: These early findings suggest that the Georgia Rural Hospital Tax Credit Program is associated with improvements in hospital financial health; however, additional studies are needed to assess the program's long-term impact on the financial sustainability of Georgia's rural hospitals.

Maryland's Global Budget Revenue Program: Impact on Neonatal Intensive Care Unit Admissions and Infant Mortality.

BACKGROUND: In 2014, Maryland implemented the Global Budget Revenue (GBR) program to reduce unnecessary hospital utilization and contain spending. Little is known about its impact on pediatric health outcomes and high-cost services that are primarily financed by payers other than Medicare. OBJECTIVE: The aim was to examine the impact of the GBR program on neonatal intensive care unit (NICU) admission and infant mortality. RESEARCH DESIGN: We conducted a difference-in-differences analysis comparing changes of NICU admissions and infant mortality in Maryland with changes in 20 comparison states (including DC), before and after implementation of the GBR program. Effects were estimated for all infants and for risk groups defined by birthweight and gestation. SUBJECTS: A total of 11,965,997 newborns in Maryland and the comparison states was identified using US birth certificate data from 2011 to 2017. MEASURES: NICU admissions, the infant mortality rate, and the neonatal mortality rate. RESULTS: The GBR program was associated with a 1.26 percentage points (-16.8%, P=0.03) decline in NICU admissions over three full years of implementation. Reductions were driven by fewer admissions among moderately low to normal birthweight (1500-3999 g) and moderately preterm to term (32-41 wk) infants. The effects for very-low birthweight and very preterm infants were small and not statistically precise. There was no significant change in infant or neonatal mortality rates. CONCLUSIONS: Maryland's hospitals reacted to the GBR program by reducing NICU services for infants that did not have clear observed clinical need. Our results suggest that GBR constrained high-cost services, without adversely affecting infant mortality.

A device category economic model of electrosurgery technologies across procedure types: a U.S. hospital budget impact analysis.

AIMS: The electrosurgical technology category is used widely, with a diverse spectrum of devices designed for different surgical needs. Historically, hospitals are supplied with electrosurgical devices from several manufacturers, and those devices are often evaluated separately; it may be more efficient to evaluate the category holistically. This study assessed the health economic impact of adopting an electrosurgical device-category from a single manufacturer. METHODS: A budget impact model was developed from a U.S. hospital perspective. The uptake of electrosurgical devices from EES (Ethicon Electrosurgery), including ultrasonic, advanced bipolar, smoke evacuators, and reusable dispersive electrodes were compared with similar MED (Medical Energy Devices) from multiple manufacturers. It was assumed that an average hospital performed 10,000 annual procedures 80% of which involved electrosurgery. Current utilization assumed 100% MED use, including advanced energy, conventional smoke mitigation options (e.g. ventilation, masks), and single-use disposable dispersive electrode devices. Future utilization assumed 100% EES use, including advanced energy devices, smoke evacuators (i.e. 80% uptake), and reusable dispersive electrodes. Surgical specialties included colorectal, bariatric, gynecology, thoracic and general surgery. Systematic reviews, network meta-analyses, and meta-regressions informed operating room (OR) time, hospital stay, and transfusion model inputs. Costs were assigned to model parameters, and price parity was assumed for advanced energy devices. The costs of disposables for dispersive electrodes and smoke-evacuators were included. RESULTS: The base-case analysis, which assessed the adoption of EES instead of MED for an average U.S. hospital predicted an annual savings of $824,760 ($101 per procedure). Savings were attributable to associated reductions with EES in OR time, days of hospital stay, and volume of disposable electrodes. Sensitivity analyses were consistent with these base-case findings. CONCLUSIONS: Category-wide adoption of electrosurgical devices from a single manufacturer demonstrated economic advantages compared with disaggregated product uptake. Future research should focus on informing comparisons of innovative electrosurgical devices.

Association of Graduate Medical Education With Hospital Performance and Patient Outcomes.

Importance: Graduate medical education (GME) funding consists of more than $10 billion annual subsidies awarded to academic hospitals to offset the cost of resident training. Critics have questioned the utility of these subsidies and accountability of recipient hospitals. Objective: To determine the association of GME funding with hospital performance by examining 3 domains of hospital operations: financial standing, clinical outcomes, and resident academic performance. Design, Setting, and Participants: This study is an economic evaluation of all academic centers that received GME funding in 2017. GME funding data were acquired from the Hospital Compare Database. Statistical analysis was performed from May 2016 to April 2020. Exposures: GME funding. Main Outcomes and Measures: This study assessed the association between GME funding and each aspect of hospital operations. Publicly available hospital financial data were used to calculate a financial performance score from 0 to 100 for each hospital. Clinical outcomes were defined as 30-day mortality, readmission, and complication rates for a set of predefined conditions. Resident academic performance was determined by Board Certification Examination (BCE) pass rates at 0, 2, and 5 years after GME funding was awarded. Confounder-adjusted linear regression models were used to test association between GME funding data and a hospital's financial standing, clinical outcomes, and resident academic performance. Results: The sample consisted of 1298 GME-funded hospitals, with a median (IQR) of 265 (168-415) beds and 32 (10-101) residents per training site. GME funding was negatively correlated with hospitals' financial scores (ß = -7.9; 95% CI, -10.9 to -4.8, P = .001). Each additional $1 million in GME funding was associated with lower 30-day mortality from myocardial infarction (-2.34%; 95% CI, -3.59% to -1.08%, P < .001), heart failure (-2.59%; 95% CI, -3.93% to -1.24%, P < .001), pneumonia (-2.20%; 95% CI, -3.99% to -0.40%, P = .02), chronic obstructive pulmonary disease ( -1.20%; 95% CI, -2.35% to -0.05%, P = .04), and stroke (-3.40%; 95% CI, -5.46% to -1.33%, P = .001). There was no association between GME funding and readmission rates. There was an association between higher GME funding and higher internal medicine BCE pass rates (0.066% [95% CI, 0.033% to 0.099%] per $1 million in GME funding; P < .001). Conclusions and Relevance: This study found a negative linear correlation between GME funding and patient mortality and a positive correlation between GME funding and resident BCE pass rates in adjusted regression models. The findings also suggest that hospitals that receive more GME funding are not more financially stable.

The Cost of Quarantine: Projecting the Financial Impact of Canceled Elective Surgery on the Nation's Hospitals.

OBJECTIVE: We sought to quantify the financial impact of elective surgery cancellations in the US during COVID-19 and simulate hospitals' recovery times from a single period of surgery cessation. BACKGROUND: COVID-19 in the US resulted in cessation of elective surgery-a substantial driver of hospital revenue-and placed patients at risk and hospitals under financial stress. We sought to quantify the financial impact of elective surgery cancellations during the pandemic and simulate hospitals' recovery times. METHODS: Elective surgical cases were abstracted from the Nationwide Inpatient Sample (2016-2017). Time series were utilized to forecast March-May 2020 revenues and demand. Sensitivity analyses were conducted to calculate the time to clear backlog cases and match expected ongoing demand in the post-COVID period. Subset analyses were performed by hospital region and teaching status. RESULTS: National revenue loss due to major elective surgery cessation was estimated to be $22.3 billion (B). Recovery to market equilibrium was conserved across strata and influenced by pre- and post-COVID capacity utilization. Median recovery time was 12-22 months across all strata. Lower pre-COVID utilization was associated with fewer months to recovery. CONCLUSIONS: Strategies to mitigate the predicted revenue loss of $22.3B due to major elective surgery cessation will vary with hospital-specific supply-demand equilibrium. If patient demand is slow to return, hospitals should focus on marketing of services; if hospital capacity is constrained, efficient capacity expansion may be beneficial. Finally, rural and urban nonteaching hospitals may face increased financial risk which may exacerbate care disparities.

Economic Impact of the Introduction of Outpatient Medical Specialist Care (ASV) of Gastrointestinal Cancer Patients from a German Hospital Management Perspective.

INTRODUCTION: The treatment of cancer patients in Germany is characterized by sectoral separation of the in- and outpatient care accompanied by 2 separate reimbursement systems. By introducing the Guideline of Outpatient Medical Specialist Care in accordance with §116b SGB V (ASV) in 2014, the German legislation empowers office-based physicians and hospitals to jointly provide medical care in the ambulatory setting. METHODS: A 1-year period each before and after the introduction of ASV was compared by means of data from the Center for Integrated Oncology Cologne at the University Hospital of Cologne. Only adults with a reliable diagnosis of gastrointestinal tumor (GIT) were considered. RESULTS: Overall, 1,872 cases were considered in the analysis showing significant (p < 0.001) higher median values of revenues across ICD-subgroups for ASV (EUR 427.46) compared to Ambulatory Treatments in Hospitals (EUR 234.21). The exemplary analysis of revenues in neoplasms of the pancreas shows EUR 173.69 on average which are only invoiceable through ASV: flat rate incl. surcharges (EUR 117.79; 68%), structure lump sum (EUR 29.49; 17%), positron-emission tomography (PET)/CT (EUR 13.53; 18%), and ASV consultation hour (EUR 12.89; 7%). DISCUSSION/CONCLUSION: ASV leads to significant higher revenues across different ICD-subgroups for patients suffering from severe GIT. The collaboration of hospital and office-based physicians ensures patient-centered care with accumulated expertise and avoidance of double examinations. Thus, the inclusion of additional services in the Uniform Value Scale (invoiceable for ASV) is legitimated and enables cost-covering care for the involved parties.

Financial performance of hospitals: A critical obligation of corporate governance dimensions.

BACKGROUND: This paper aims to investigate the effects of corporate governance mechanisms on the financial performance of hospitals. The statement, "good corporate governance" has been incorporated in the health care sector over the last decade, as an element to improve financial performance. METHODS: The researchers relied on both primary and secondary data in the study. For the primary data, the authors used structured and nonstructured questionnaires to obtain data from 125 hospitals. The secondary data used emanated from board meetings, financial statements and relevant reports of the selected hospitals from 2010 to 2017. However, the data was then sorted out to get the required information on Chief Executive Officer (CEO) presence, board relationship, governance dynamics, gender diversity and financial performance. RESULTS: On the basis of empirical evidence provided in this study, the results show that the Independent Directors (INDPDR) variable has a positive effect on Return on Assets and Net Profit Margin and also a high statistically significant value of 0.000 for both performance measures. This is an indication that the variable, INDPDR, is highly capable of improving hospital financial performance. From our studies, Board Size and CEO Duality exhibited a negative relationship with the financial performance measures. CONCLUSIONS: Every hospital needs money to maintain a standard health facility and to sustain in operation. However, the inclusion of board of directors improves hospital financial management and enhances performance. Corporate governance mechanisms influence the behavior of health systems in ways that are associated with financial performance.

Efficiency and profitability in US not-for-profit hospitals.

This article examines the relationship between hospital profitability and efficiency. A cross-section of 1317 U.S. metropolitan, acute care, not-for-profit hospitals for the year 2015 was employed. We use a frontier method, stochastic frontier analysis, to estimate hospital efficiency. Total margin and operating margin were used as profit variables in OLS regressions that were corrected for heteroskedacity. In addition to estimated efficiency, control variables for internal and external correlates of profitability were included in the regression models. We found that more efficient hospitals were also more profitable. The results show a positive relationship between profitability and size, concentration of output, occupancy rate and membership in a multi-hospital system. An inverse relationship was found between profits and academic medical centers, average length of stay, location in a Medicaid expansion state, Medicaid and Medicare share of admissions, and unemployment rate. The results of a Hausman test indicates that efficiency is exogenous in the profit equations. The findings suggest that not-for-profit hospitals will be responsive to incentives for increasing efficiency and use market power to increase surplus to pursue their objectives.