• Korea Journal of Hospital Management
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• v.8 no.4
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• pp.59-75
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• 2003

This study was conducted to investigate the degree of utilization of outsourcing in large hospitals in Korea. We also investigated the outcome and the level of satisfaction for adopting outsourcing in these hospitals. Types of work areas that were currently operated by outsourcing and were planned to adopt outsourcing in the future were identified. A total of 83 hospitals were eligible for this study, which had more than 500 beds, and were identified from the 2003 National Hospital List published by the Korean Hospital Association. A self-administered Questionnaire survey was conducted between April 25th and May 20th in 2003 with a personnel being charged of arrangement of outsourcing in each hospital. Among the 58 hospitals responding the survey(response rate=69.9%), 49 hospitals(84.5%) utilized outsourcing in at least one work field in their organizations. The largest proportion of the hospitals(85.7%) using outsourcing responded that the biggest outcome after introducing outsourcing were cost reduction(49.0%), followed by improved efficiency in operating the organization or human resources(34.7%) and the improved quality of the work(6.1%). The degree of satisfaction for outsourcing among the hospital managers(3.43) was significantly higher than that among the employees(3.l4) on a S-point Likert-type scale(p<0.05). Among the 7 work areas, the hospitals used outsourcing most frequently in facility management(housekeeping, building maintenance, hospital security and parking management), followed by non-medical profit business(funeral, convenient store, and cafeteria), logistics(provision of patient meal, in-house delivery, and purchasing), and information and computing system(hospital information system, maintenance of personal computers and printers). The work areas that the hospitals planned to adopt or expand the outsourcing in the future most frequently were facility management, non-medical profit business, logistics, and information and computing systems. In conclusion, outsourcing was highly diffused in large Korean hospitals, particularly in the work field of facility management and non-medical profit business. The satisfaction for outsourcing was not high yet in Korean hospitals.

• Health Policy and Management
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• v.11 no.4
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• pp.38-53
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• 2001

The price of the hospitals' services is regulated by the governmental health insurance reimbursement schedule in Korea. On the other hand, the emphasis on the quality of care of hospitals service is ever increasing. Under the environment, hospitals have to understand the effects of the activities to improve quality of care on efficiency and on financial performance so that they develop a management strategy that allows quality of care, operational efficiency, and financial achievement simultaneously. This study investigates the relationship among the concepts. The sample for the study includes 23 hospitals that have more than 300 beds. The concept of quality of care is measured by the score reported by the Hospital Standardization Survey (HSS) instituted by Korean Hospital Association. Efficiency is measured by the ratio of number of employee to the number of patients served. Financial performance is measured by the financial ratios indicating the profitability of a hospital. An analysis is performed using the multiple regression. The results show significant positive relationships between the HSS score and efficiency indicators, md between the HSS score and profit measures. However, the significant positive relationship between the HSS score and profit measures disappeared when efficiency indicators were introduced to the model. This study concludes that the structural quality of a hospital has a positive effect on efficiency of the hospital and that the structural qualify indirectly affects the financial performance of a hospital through the improvement of efficiency. Based on the findings, the implications on hospital management and health policy are discussed.

• Korea Journal of Hospital Management
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• v.23 no.4
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• pp.53-64
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• 2018

Purposes: The hospitals needs to generate a minimum profit, in order to perform its own role such as providing high-quality medical services. The demand for hospital management is increasing, as the social demands are diversified and the financial transparency is emphasized. The purpose of this study is to compare hospitals management based on Dupont Identity, by various hospital classification. Methodology: This study is based on '2016 Statistics for Hospital Management' provided by the Korea Health Industry Development Institute. The hospitals were classified according to the scope of care, the type of establishment, the location, and the number of beds. We analyzed the general and financial characteristics of over 337 hospitals using the method of Dupont Identity. Findings: Net profit margin (PM) has the biggest impact on return of equity (ROE). By the number of beds, general hospital with 160-299 beds have the highest return on equity (ROE). By location, hospitals in local municipalities have higher return on equity than hospitals in urban municipalities. According to the type of establishment, public hospitals have lower business performance, and although they invest more than private hospitals. Practical Implications: This study can inspire interest and provide understanding in hospital management and financial structure, by analyzing through an intuitive indicator named Dupont identity. It is possible to provide basic data for hospital management methods for each financial elements, in order to increase the profitability of hospitals.

• Journal of Korean Clinical Health Science
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• v.3 no.1
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• pp.276-289
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• 2015

Purpose. To efficiently manage hospitals, this study aims to analyze the general characteristics, common-type balance sheet, common-type profit and loss statement and financial ratio of a tertiary general hospital and use the results as basic data for future hospital development by comprehending causes for problems and analyzing hospital management. Methods. By using information about a tertiary general hospital, located in A Metropolitan City, provided through Alio (www.alio.go.kr), a public organization information provider, Health Insurance Review & Assessment Service, and Ministry of Health and Welfare, this study used data during 3 years(2011 to 2013) by analyzing the general characteristics, common-type balance sheet, common-type profit and loss statement, industrial mean ratio and financial ratio of hospitals. Results. This study came to the following conclusions through the general characteristics, common-type balance sheet, common-type profit and loss statement, industrial mean ratio, financial ratio, circular chart and ROI by analyzing the data from 2011 to 2013. Conclusions. Overall, A Tertiary General Hospital showed an increase in fixed cost due to the construction of J Hospital and even in the size of capital and assets. It also showed an increase in medical profit, but the increase of its medical cost was higher, resulting in a financial loss. Especially, this hospital showed a slight decrease in net profit, featuring a reduction in inventory turnover. When the management of A Tertiary General Hospital was predicted based on such features, this hospital is expected to improve its profit structure through the opening of J Hospital, and it is necessary for this hospital to increase and sustain the turnover rate of inventories accumulated by managing them better.

• Health Policy and Management
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• v.13 no.3
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• pp.52-70
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• 2003

The rate of conversion to Medical-juridical-persons' ownership of medical institutions has increased rapidly since its start in 1970s in Korea. The most sensitive issue to introduce for-profit medical institutions, ignited particularly by the WTO/DDA negotiations, has sparked considerable debate, stemming largely from conflicting views on the theoretical effects of ownership status on organizational behavior. This study surveyed health-related experts' opinions on allowing for for-profit-firms-owned medical institutions. Some fear that the obligation to maximize the share-holders' return on their investment will cause the medical institutions to eliminate necessary but less lucrative services. They may easily fall under more pressure to generate income, and respond more aggressively than not-for-profit medical institutions to financial pressures. Advocates of for-profit ownership of medical institutions argue that greater responsiveness to the demands of the marketplace will lead to larger investment, higher quality and lower costs to consumers. Referring to both foreign countries' experience and domestic experts' opinions, this study suggests for reform of the current Korean Medical-Juridical-Person(MJP) System. Introduction of so-called “Capital-investment” MJPs is recommended where the properties left in case of their dissolution can be distributed to original investors according to the procedures stipulated in their statutes. However, their annual profits are not allowed to be allocated to investors, but should be reinvested for their medical institutions, as is the case in current MJPs. Their legal aspects are also reviewed in this study.

• Health Policy and Management
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• v.33 no.1
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• pp.55-64
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• 2023

Background: Despite the various activities of the regional public hospitals, discussions are being made as to whether or not to continue due to the issue of financial deficit. Therefore, the main factors affecting the fiscal deficit were analyzed with 10-year data. Methods: This study is a panel analysis that analyzed the characteristics of 34 regional public hospitals and influencing factors on medical benefits for 10 years from 2010 to 2019. First, we analyze the determinants of medically vulnerable areas set by the government, analyze the trend of medical profit per 100 beds and medical profit rate from 2010 to 2019, and identify the factors that affect them. Results: Differences in medical profit per 100 beds and medical profit-to-medical profit rate were caused by market share representing regional characteristics, and both indicators improved as the number of outpatients increased. The important influencing variables are the number of doctors and nurses, and both indicators improve when there are specialists, but medical benefits decrease as the number of doctors increases when judged by the number of people per 100 beds. In addition, the number of nurses per 100 beds does not contribute to medical profit and has a negative effect on the medical profit ratio. Conclusion: As only regional characteristics were taken into account for medically vulnerable areas, operational characteristics need to be considered. The greatest impact on the finances of local medical centers is the proper staffing of doctors and nurses, and their efficient arrangement is the most important factor in financial stability.

• Korea Journal of Hospital Management
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• v.12 no.2
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• pp.43-68
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• 2007

The administration of a regional public hospitals are expending from profit preference to publicity preference. The weight rate for a profitability and publicity of performance assessment has changed from 84:16 which was resulted by the assessment executed firstly in 1989 to 39:61 as resulted in 2004, the final assessment execution in 2005. Regional public hospitals are exerting and promoting a magnification in public sector to raise up the public-score. With comparison between publicity scores and profitability scores in original scores basis excluding weight rate, the publicity scores ranked higher than profitability scores although the latter was higher by 2002. However, for the administration performance of the regional public hospitals, the deficits increased 11 times from \92.6billion deficits with \460.3billion cost increased by 457% although income as \367.7billion increased by 394% comparing the last 2004 year to the first 1989 year for profit & loss statement of a regional public hospitals. There was analysis for the relation in yearly basis partitioning publicity and profitability for the assessment scores of the to regional public hospitals confirm the accumulated deficits of the hospitals like this attribute to the extension of public sector. The result showed that there was distinct plus relationship from 1999 although a minus relationship in general until 1997 except 1992 and there is a more plus relationship as approaching 2004. That is, it is hard to tell that the accumulated deficits increase of regional government medical center attributed to extension of public sector. On the contrary, the analysis showed the extension of public sector has a mutual relationship with uplift of profitability Meanwhile, it showed that operation cost rate and labor cost are the factors which influence a revenue & expenditure rate among the profitability index according to the results of relation analysis for the representative index of profitability and that of publicity.

• Korea Journal of Hospital Management
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• v.27 no.3
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• pp.26-38
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• 2022

Purposes: We analyzed the profitability determinants of regional public hospitals during the entire period between 2010 and 2020 and the period before and after COVID-19. We intended to provide fundamental data for developing publicness evaluation index and task of establishing and expanding regional public hospitals. Methodology: The financial and non-financial information of the regional public hospitals were used as the main analysis data; The financial data was established by the Center for Public Healthcare Policy of National Medical Center, and the non-financial data by the Health Insurance Review and Assessment Service. T-test and regression analysis were used. Findings: The results can be summarized in two. First, the main determinants of profitability of the regional public hospitals were appeared to be the total asset turnover rate and the labor cost rate. Second, during the COVID-19 pandemic in the regional public hospitals, the number of sickbeds, the number of isolation rooms, the total asset turnover rate and the labor cost rate appeared to be the factor worsening the profitability. Practical Implication: The results of this study suggests that the management of the regional public hospitals is not aiming for the profit making, but it performs the functions as the community healthcare safety net such as controlling infectious diseases.

• Journal of Convergence for Information Technology
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• v.10 no.9
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• pp.206-214
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• 2020

This study analyzed the impact of direct and indirect subsidies on profitability in general hospitals in Korea. The data were collected from medical institution accounting information disclosure system of 270 general hospitals from 2016 to 2018. The analysis index used the ratio of net profit to business revenue for profitability, and Subsidies index the ratio of subsidies to business revenue(state subsidies for facility investment purposes, Fund related to essential business, research revenue and contribution revenue). According to the study, the ratio of state subsidies, which are direct subsidies, was very high at 57.30 percent for public institution hospitals. ratio of Fund related to essential business, which is a tax reduction effect with indirect subsidies, had the highest at 6.69 percent for Private University Hospitals. which are Indirect subsidies for deficit or operational assistance, research revenue ratio had the highest 2.8 percent for National University Hospitals, contribution revenue ratio had the highest 36.4 percent for public institutions. As a result of looking at the impact of subsidies on profitability, Nation University Hospitals had the lower the ratio of Fund related to essential business and the ratio of research revenue, the higher the net profit ratio of Business revenue. Medical Corporation Hospitals and Foundation Hospitals had the higher the ratio of Fund related to essential business to business revenues, the higher the net profit ratio of business revenue. These results mean that profitability may fluctuate depending on the utilization of funds related to essential business.

• The Journal of Korean Medicine
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• v.41 no.1
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• pp.1-10
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• 2020

Objectives: This study investigated the financial performance of Korean Medicine hospitals in Korea in order to understand the current status of hospital management and improve its efficiency. Methods: Financial statements of 24 medical corporations, 19 juridical foundations and 18 school hospitals from 2016 to 2018 were obtained from the secondary data published by the Health Insurance Review and Assessment Service, the National Tax Service and the Korea Advancing Schools Foundation. Financial performance was measured on 6 dimensions: liquidity, profitability, activity, growth, cost and productivity (investment efficiency) by analyzing 8 financial indicators: Liability to Total Assets, Net Profit to Patient Service Revenues, Total Assets Turnover, Growth Rate of Patient Service Revenues, Operating Expenses to Patient Service Revenues, Value Added to Patient Service Revenues, Value Added to Total Assets, and Value Added to Personnel Expenses. Results: Korean Medicine hospitals showed lower Liability to Total Assets, Liquidity and Value Added to Total Assets than Western Medicine hospitals did. They also showed higher Value Added to Patient Service Revenues and Value Added to Personnel Expenses than Western Medicine hospitals did. They also showed higher Value Added to Patient Service Revenues and Value Added to Personnel Expenses than those of Western Medicine hospitals do. The net profit decreased significantly (-50.8%) in 2018 whereas Patient Service Revenues increased (6.9%) for the same period due to Operating Expenses increase and Non-Operating loss. Conclusions: These findings suggest that the Korean Medicine hospital sector in Korea needs to improve liquidity and financial structure and to enhance profitability by reducing Personnel Expenses and generating Non-operating revenues in order to improve its investment efficiency and competitiveness.