When hospitals contract-out their services: collection problems.

Abstract

As a result of having excess personnel and operating plant capacity due to reduced bed census, some hospitals are contracting-out their services to other businesses. Some non-profit hospitals are apparently forming another corporation or other type of business entity to handle these activities in an effort to preserve their non-profit status. Some of the activities mentioned are cleaning and housekeeping, window washing, central procurement, printing, catering, parking lot operation and maintenance, and incineration of waste products. Purchasing and materials management executives are being asked to organize and manage this type of activity. Some are reporting not only organizational problems, but problems with collection of accounts receivable generated from such activities.