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KMID : 0861120140180010043
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Korean Journal of Oriental Preventive Medicine
2014 Volume.18 No. 1 p.43 ~ p.52
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Financial Ratio Analysis of Oriental Medicine Hospital affiliated with Universities
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Lee Woo-Cheon
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Abstract
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This study was conducted to analyze if there is a difference between the head hospital and branchhospital by comparing the profitability and operating expenses to patient revenue of oriental medicinehospitals affiliated with universities in order to find whether opening branch hospitals is an appropriatemethod to increase profitability. Profit indices used for the comparison of head hospital and branchhospital include ratio of operating profit on medical revenue, net-income on medical revenue, net profitto total assets, and operating profit to total assets; and cost indices included ratio of labor costs, materialcosts and administrative costs. In comparison of profit indices of head hospitals and branch hospitals, head hospitals displayed negative(-)in all four profit index averages while branch hospitals displayed positive(+), showing that branch hospitalshave higher profitability. In particular, in the case of head hospitals, ratio of net profit to total assetswas -13.6%, while that of branch hospitals was 12.9%, which was higher than 3.1%, the average of Koreanoriental medicine hospitals in 2011. As a result of difference analysis between groups of head hospitals and branch hospitals, profit indices ofratio of operating profit on medical revenue, net-income on medical revenue, and ratio of net profit tototal assets were found to vary by hospitals, but there was no statistically significant difference betweenhead hospitals and branch hospitals(p<0.1). Only the ratio of operating profit to total assets of head hospitalsand branch hospitals indicated significant difference between the two groups, showing that ratio ofoperating profit to total assets of branch hospitals is larger than that of head hospitals. Meanwhile, thecost indices of ratio of labor costs, material costs and administrative costs in the difference test resultsdid not show significant difference between the head hospital and branch hospital(p<0.1). Thus, it cannot be said that a certain oriental medicine hospital’s profitability is high or low depending onwhether it is head hospital or a branch as profitability varies depending on the management environmentof the hospital. Therefore, oriental medicine hospitals affiliated with universities would need to make efforts to increase their profitability as an individual hospital rather than focusing on whether they are headhospital or a branch.
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KEYWORD
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Oriental medicine hospital, Financial ratio
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