5 Primary Financial Metrics for Critical Access Hospitals

Critical access hospitals represent roughly 80 percent of all small rural hospitals in the United States, and their financial viability is pertinent to the remote areas that provide the much-needed healthcare, according to an article from researchers at the University of North Carolina.

The research, which was supported by HHS, the Federal Office of Rural Health Policy and the Health Resources and Services Administration, found five main key performance indicators that best measure performance critical to the success of a CAH without cluttering interpretation.

1. Cash flow margin. Interpretation: The dollars of cash inflow per dollar of revenue from providing patient care services.

2. Days cash on hand. Interpretation: The number of days an organization could operate if no cash was collected or received.

3. Debt service coverage. Interpretation: The dollars of cash inflow per dollar of principal payments and interest expense.

4. Long-term debt to capitalization. Interpretation: Percentage of total capital that is debt.

5. Medicare outpatient cost to charge. Interpretation: Outpatient Medicare costs per dollar of outpatient Medicare charges.

More Articles on Hospital Financial Metrics:

5 Ways to Leverage Data Mining to Build an Efficient Business Office

9 Ways Better Data Can Drive Hospital Bundled Payment Initiatives

The 4 Dimensions of Hospital Accountability

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