Hospital financial distress, recovery and closure: Managerial incentives and political costs
Journal of Public Budgeting, Accounting & Financial Management
ISSN: 1096-3367
Article publication date: 1 March 2011
Abstract
The purpose of this study is to examine the association of managerial incentives and political costs with hospital financial distress, recovery or closure. The Medicare Payment Advisory Commission has stated that hospital closures are important for evaluating the distribution of cost, quality and access to healthcare throughout the US. Using Logistic regression, we demonstrate that hospital closure is associated with low occupancy, return on investment, asset turnover, and lack of affiliation with a multihospital system. It is also significantly associated with urban location, teaching programs, high Medicare and Medicaid patient populations, and high debt. Essential access nonprofit hospitals are less likely to close, while this does not affect governmental and for-profit hospitals. Our research hypotheses are supported by these results.
Citation
Liu, L.-L.(S)., Jervis, K.J., Younis, M.(M).Z. and Forgione, D.A. (2011), "Hospital financial distress, recovery and closure: Managerial incentives and political costs", Journal of Public Budgeting, Accounting & Financial Management, Vol. 23 No. 1, pp. 31-68. https://doi.org/10.1108/JPBAFM-23-01-2011-B002
Publisher
:Emerald Publishing Limited
Copyright © 2011 by PrAcademics Press