Thesis
Indicators of financial solvency in U.S. hospitals and health systems: a systematic review of the literature
Washington State University
Master of Health Policy and Administration (MHPA), Washington State University
2009
Handle:
https://hdl.handle.net/2376/102128
Abstract
The purpose of this information synthesis is to systematically and critically review the financial, market, and operational indicators of solvency in U.S. hospitals and health systems. The cash flow theory, resource dependency theory, and organizational-environmental theory provide the underlying theoretical frameworks for the identification of the solvency indicators. Solvency articles are subjected to the Peter Goldschmidt and Judith Garrard methodologies for completing a systematic review of the literature. Fourteen empirical studies constitute the body of literature on this topic, and these studies are assessed, summarized, and presented in a literature review matrix. The findings from this information synthesis identify a cumulative list of over 80 statistically significant solvency indicators. The statistically significant financial indicators that are validated by more than one empirical study are: Altman's Z-score, cash flow margin, days cash on hand, and debt per bed. The statistically significant market indicator that is validated by more than one study is: Medicare/Medicaid payer mix. The statistically significant operational indicators that are validated by more than one study are: age of plant, occupancy rate, average length of stay, number of beds, and ownership type (for-profit or not for-profit). These ten indicators provide a starting point for a thorough solvency analysis. The complexity of hospital solvency in terms of the number and mix of solvency indicators is demonstrated in this review. It is recommended that hospital managers utilize metrics from each of the three categories of indicators: financial, market, and operational, to enhance the likelihood of correctly identifying the warning signs of insolvency. Possible directions for future research include comparative studies on the validity and reliability of the indicators, as well as studies that identify the extent to which a given indicator is able to predict insolvency. Finally, this systematic review of the literature concludes that by continually tracking these ten metrics, managers can monitor the early warning signs of financial difficulties, identify areas of financial, market, and operational weakness, and identify and implement the necessary corrective action to avoid financial disaster
Metrics
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Details
- Title
- Indicators of financial solvency in U.S. hospitals and health systems
- Creators
- Amy V. Semritc
- Contributors
- Joseph S. Coyne (Degree Supervisor)
- Awarding Institution
- Washington State University
- Academic Unit
- Health Policy and Administration, Department of
- Theses and Dissertations
- Master of Health Policy and Administration (MHPA), Washington State University
- Publisher
- Washington State University; Pullman, Wash. :
- Identifiers
- 99900525371201842
- Language
- English
- Resource Type
- Thesis