Advantages of Mutihospital Systems - Essay Example

Laboratory tests and billing once done are saved on these records without the risk of duplication or errors. For these reasons, EHRs prove to be very efficient while reducing unnecessary costs once implemented. In a multi-hospital system, the overall organizational structure affects “the operating costs of member hospitals” (Fournier & Mitchell, 1997). Researchers believe that since most of the revenue for a multi-hospital system comes from third-party payers, the financial management tasks such as financial reporting and cost accounting systems have seen improvement.

Multi-hospital systems obtain and maintain financial managers at the corporate level but this has diverted the attention from cost control to reimbursement maximization. Capital planning is a multi-hospital system, despite better access to capital, is more difficult than in a standalone system. However, the financial community offers advantageous borrowing conditions to multi-hospital systems than standalone hospitals. An independent hospital is believed to be at lower financial risk because of its lower revenue, assets, equity, and debt capacity.

Financial management tasks are much easier in standalone hospitals and the danger of financial fraudulent activities is also reduced as compared to a multihospital system.ReferencesFournier GM. & Mitchell JM. (1997). New evidence on the performance advantages of multihospital systems. Review of Industrial Organization, 12, pp. 703-718.Sidorov, J. (2006). It ain’t necessarily so: the electronic health record and the unlikely prospect of reducing health care costs. Health Affairs, 25(4), pp.

1079-1085.Williams, KR. (2010). Electronic health records reduce costs while improving patient care. EzineArticles.com. Retrieved September 4, 2010, from http://ezinearticles.com/?Electronic-Health-Records-Reduce-Costs-While-Improving-Patient-Care&id=4582113