Biomedical subjects
Publications and source records attributed to William O Cleverley.
To develop a dashboard reporting system for hospitals, four critical factors should be taken into account: Factors most important to the organization's success. Critical drivers that influence performance attainment. Relevant measures. Relevant benchmarking data.
Resolving the conflict between generating a profit and keeping prices reasonable is critical to the financial welfare of the hospital industry. Four steps may make this resolution easier: (1) determine the level of profit required, (2) assess the reasonableness of current costs, (3) assess the reasonableness of current prices, and (4) negotiate more equitable payment arrangements.
The Medicare program likely faces restructuring over the long term, but payment mechanics are not expected to change over the short term. As Medicare payment continues to challenge hospitals, providers need to implement effective strategies to survive. A review of hospital Medicare inpatient and outpatient data found that providers that can manage costs and revenue will be successful.
Pricing is an effective strategy for increasing hospital revenue. Usually between 10 and 25 percent of a hospital's business is charge-related. Hospital executives should consider price-driven payment, such as that affected by carve-out arrangements. Critical pricing issues must be thoroughly understood to perform an effective pricing study.
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Hospital senior financial executives routinely review measures of facility costs to assess their organization's cost-efficiency. The measures they typically use for this activity are cost per adjusted discharge and cost per adjusted patient day. These measures have flaws that limit their usefulness for comparing cost-efficiency of different hospitals. A more effective measure is the hospital cost index (HCI), which adjusts for case-mix complexity in both inpatient and outpatient operations and can be computed from publicly available databases. The highly reliable HCI enables senior financial executives to make comparison among specific hospitals, including direct competitors.
Two high-profile business failures should be a wake-up call for hospital leaders. Management and boards cannot rely on unaudited financial statements as the principal indicator of financial health. Boards must ensure diligent analysis of key financial measures. Board members need better education about healthcare finance. Hospitals are not immune to financial collapse.
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Explore the source record for details and available documents.
Explore the source record for details and available documents.
Explore the source record for details and available documents.
Explore the source record for details and available documents.
The ten large systems reviewed in this column have greater degrees of financial leverage than do most freestanding hospitals. Larger firms typically have both greater capital access and lower costs of financing. Both voluntary and IO systems make extensive use of variable rate financing, but the percentage of variable rate financing is slightly higher for voluntary systems. This difference may be attributable to larger yield curve spreads for tax-exempt versus taxable securities. Interest rate swaps were used by 70 percent of the systems, but the actual amount swapped was relatively minor. This may change in the future as financial officers become more comfortable and familiar with interest rate swap arrangements. When compared to IO systems, voluntary systems have extensive levels of cash relative to their debt positions. Cash balances are more critical in the bond-rating process for voluntary hospitals, and the ability to raise new equity is much more limited in the voluntary sector. Very little capital leasing was used in any of the systems.