Administrators Need More Responsive Scorecards
HealthLeaders looks at the metrics and goals hospital CEOs and CFOs need to track. Being armed with almost real-time financial measurements can help management react in a timely fashion and improve their bottom line. Ingalls Memorial Hospital in Harvey, Ill., measures admissions, outpatient visits and emergency department visits as well as the staffing levels necessary to accomodate them. Its CFO Vincent Pryor is specifically looking at the relationship between volume and revenue, which can uncover unsubmitted charges. Other people interviewed in this article advocate transparency within the organization so that floor-level managers can quickly get relevant data and act on it, typically to adjust staffing and supplies expenses.
The Healthcare Financial Management Association (HFMA) came up with a list of 11 key metrics, especially for hospitals which have a rating from bond-rating agencies:
- Operating margin
- Excess margin
- Debt service coverage
- Current ratio
- Days cash on hand
- Cushion ratio
- Days accounts receivable
- Average payment period days
- Average age of plant
- Debt to capitalization
- Capital expense
HealthLeaders also comes up with a list of recommendations to help its readers select the right software package for their reporting and business intelligence needs.
June 16, 2006 Related topics: Finance, IT & software