Question

Define and explain several financial performance indicators in a hospital setting?"

Answer 1

Financial Performance Measurement is required in every organization to justify the growth and performace of the organization during the course of it's operation and it can be define as the tools or mechanism used to measure the performace of the organization.

The Financial Indicator which are used in day to day operation typically in finance operation are as follows :-

1) Payable (Creditor) Period - The credit period received from the creditor for making the payment of supplies taken for hospital, Greater the Better

2) Receivable (Debtor) Collection Period - The credit period given to our customer for making the payment for sales of supplies made to them, Lesser the better.

3) Inventory Holding Period - It is says that in how many number's of days fresh inventory is ordered in place old inventory get sold out or used.

4) Cash Flow - It gives us the Cash report for our organisation on monthly, Quarterly or even on daily basis, In short it shows the liquidity of the hospital organization. Higher the better.

5) Budget vs Actual Spending - The budget should be made to monitor and regularize and control our expenses, and after making that so the Budget should be compared with actuals to check for the variances.

And other Financial Indicator used specifically in Hospital Industries are as follows.

1) Beds to Population ratio. - Beds in hospital over Population

2) Nurses to Population Ratio. - Nurses in hospital over Population

3) Physicians to Population Ratio. - Physicians in hospital over Population

4) Healthcare Cost per Capita.- Total Healthcare cost per person.

5) Maintanence cost to Population Ratio.

6) Capacity Planning.- How to utilize the full capacity of hospital

7) Cost of Outpaitent Visit.

8) Cost of salary and Overtime. total cost of salary and overtime.