Interrelated Factors with Hospital Financial Performance from Hospital Managers’ Perspective

Abstract

This study aims to investigate the interrelated factors regarding hospital financial performance by considering cost and quality indicators from hospital managers’ point of view. Data collected from face-to-face interviews from ninety senior managers working in twenty different public and private hospitals in the Ankara metropolitan area. A path analysis was used to quantify both the direct effect of cost performance on quality performance and the indirect effect of cost performance on financial performance as mediated by a hospital’s quality performance. A final path model highlights that constructs related to both cost and quality affect financial performance. Study results support the evidence that cost, quality, and financial performance indicators are causally related and quality indicators mediate these associations. The goodness-of-fit indices were acceptable (X²/df = 34.22/15 = 2.28; RMSEA = 0.12; GFI = 0.90; AGFI = 0.81). Moreover, the results support the relationships among the constructs in which labor productivity and capacity utilization mediate the effect of clinical quality on patient satisfaction, and patient satisfaction mediates the effect of market share on operating profits. The present results are helpful to identify the associated factors of hospital financial performance and to extract the effect of sensible cost and quality factors on financial performance. Study results suggest some maintenance and operational actions to better manage financial performance by considering the mediating role of patient satisfaction.