Question

How can a public hospital have a low or negative operating margin yet have enough funds to survive and prosper?   less than 300 words

Answer 1

Operating margin is defined as operating income divided by operating revenues. Further the operating revenues are the sum up of the patient service revenue and premium revenue.

The operating margin ratio is used to calculate the profits earned from the organizations by the managers.

Further if there is low or negative operating margin it means the loss of the organization or the hospital.

The researchs reveals that in the public hospitals there is negative operating margin which indicates their poor finanicial management resulting in the loss.

It is seen that in public hospitals they have enough fund provided by the government but due to the mismanagement and minimum or low utilization of the resources have created the finantial loss operations.

Hence it is advised for the policy makers that they should proceed after the complete analysis of the current hospital operating profitability status. There should be active involement of the nursing staff in the policy making , thus can reduce the cost of the system.

There should be proper store management to reduce the financial losses.

The payment system should be transparent and within time to reduce the chaces of the errors in the revenue management.

Thus by proper financial management and reports analysis we can correvct the existing ow or negative operating margin in the public hospitals.