Financial Analysis of National University Hospitals in Korea

Abstract

Objectives: This paper provides information for decision making of the managers and the staff of national university hospitals. Methods: In order to conduct a financial analysis of national university hospitals, this study uses reports on the final accounts of 10 university hospitals from 2008 to 2011. Results: The results of comparing 2008 and 2011 showed that there was a general decrease in total assets, an increase in liabilities, and a decrease in total medical revenues, with a continuous deficit in many hospitals. Moreover, as national university hospitals have low debt dependence, their management conditions generally seem satisfactory. However, some individual hospitals suffer severe financial difficulties and thus depend on short-term debts, which generally aggravate the profit and loss structure. Various indicators show that the financial state and business performance of national university hospitals have been deteriorating. Conclusion: These research findings will be used as important basic data for managers who make direct decisions in this uncertain business environment or by researchers who analyze the medical industry to enable informed decisionmaking and optimized execution. Furthermore, this study is expected to contribute to raising government awareness of the need to foster and support the national university hospital industry.