Thomas L. Zeller

A revised classification pattern of hospital financial ratios

Abstract Health care administrators, governing boards, and public policy groups employ a broad array of financial ratios to assess hospital performance. However, only a few ratios may be necessary for meaningful insight. Our paper explores the common financial characteristics of performance which can be accurately and parsimoniously summarized by hospital financial ratios. We define a characteristic of performance as a group of ratios which measure essentially the same financial activity of a firm (see footnote 1 in our paper). First, a statistical-based taxonomy of financial ratios was used to explore the financial characteristics of 2,189 U.S. hospitals. Second, the taxonomy was employed to examine the correlations among the specific ratios which signal the characteristics of financial performance. Our findings: 1) indicate that hospital financial characteristics of performance reported in our study are different from previously reported findings in the literature, (which are reviewed in our paper) and 2) provide suggestions for future research in determining the value of the identified characteristics for decision making in the health care industry.

Manage indirect practice expense the way you practice medicine: With information

PURPOSE: Surgeons are increasingly faced with the pressures of maintaining the highest quality of patient care, while at the same time maintaining financial viability. The purpose of this project was to provide a framework for analyzing practice costs for colorectal surgeons using an activity-based cost accounting model. METHODS: A survey of 11 practices that were diverse in terms of geography, managed care penetration, academicvs. private practice style, and case distribution was performed. In activity-based costing the assignment of typical costs such as staff salaries are assigned to the appropriate business process. The business processes employed in this study were service patients in the office, perform in-office procedures, schedule cases in facilities, service patients in the hospital, insurance authorization, maintain medical records, billing, collections, resolve billing disputes, interaction with third parties, maintain professional education, sustain and manage the practice, maintain the facility, teaching and research, and performing drug studies. The final step is to assign the cost associated with all appropriate business processes to the appropriate cost object. The cost objects in this study were defined as a charge office visit, no-charge office visit, charge hospital visit, in-office procedures, in-facility procedures, and performing drug studies. The data were then analyzed to allow a comparison of four similar practices within the study group. RESULTS: The data demonstrated that the cost of seeing a charge office visit ranged from

Focused e-tail measurement and resource management

55 to

Foreign currency translation under the temporal rate method

105. Similarly, the cost of seeing a no-charge office visit during the global period ranged from

Have changes in business practices and reporting standards changed the taxonomy of financial ratios

43 to

Achieving market excellence through quality: The case of Ford Motor Company

100. The study analyzed possible explanations for the wide variability in these costs. CONCLUSIONS: It is essential that physicians clearly understand the sources of expenses generated by the operation of their practices. A clear comprehension of costs will lead colorectal surgeons to make appropriate decisions regarding such important issues as office staffing ratios, office square footage, and instrumentation acquisitions.

A new perspective on hospital financial ratio analysis

Abstract Here is a framework, gleaned from a two-and-a-half-year study, for strategically measuring and evaluating the customer value proposition for anyone living in or entering the e-tail world. The first part provides a measurement structure to fence in the costs of going e-tail. The second identifies a reporting structure to focus succinctly on the financial outcome(s) of managements decisions. E-tailers can use this reporting structure to guide their companies.

Good Bye Traditional Budgeting, Hello Rolling Forecast: Has The Time Come?

Statements of Financial Accounting Standards (SFAS) are rules and procedures designed to establish reliable financial information. The Financial Accounting Standards Board (FASB) defines reliable financial information in Statement of Financial Accounting Concept No. 2 as information that is reasonably free from error and bias and faithfully represents what it purports to represent [FASB, 1980, paragraphs 59, 77]. Under SFAS No. 52 [FASB, 1981], however, the temporal rate method of translating foreign currency denominated financial statements may not produce reliable information. The result is that consolidated financial statements of U.S. companies may include unreliable components such as under (over) valued assets. The findings of this paper are important because unreliable financial information places U.S. firms at a competitive disadvantage by hindering efficient and effective business decisions.

The Arrival Of A New GAAP: International Financial Reporting Standards

Purpose – Prior research established a seven dimensional taxonomy of financial ratios. The purpose of this paper is to identify the extent to which the previously identified relationships have changed, and if appropriate, to establish an entirely new taxonomy of manufacturing industry financial ratios. Design/methodology/approach – The authors used principle component analysis (PCA) to identify factor patterns for 58 financial ratios over the ten-year period 2004-2013. The validity of employing PCA was confirmed using the Kaiser-Meyer-Olkin measure of sampling adequacy and Bartlett’s test of sphericity. Findings – This study identified four additional financial analysis factors beyond the seven established by prior research. Notably, a separate cash flow factor did not surface as was the case in earlier work but an entirely new factor (current position) was identified. Research limitations/implications – This paper leaves to future research to establish the precise causes for the changes to the taxonomy o...