Evaluating the Feasibility of Financial Variables of Health: A Hospital Administrator’s Viewpoint

  • Abasat Mirzaei Health Services Management, Science and Research Branch, Islamic Azad University, Tehran, Iran
  • Seyed Jamaledin Tabibi Health Services Management Department, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
  • Amir Ashkan Nasiripour Health Services Management Department, Science and Research Branch, Islamic Azad University, Tehran, Iran
  • Leila Riahi Health Services Management Department, Science and Research Branch, Islamic Azad University, Tehran, Iran
Keywords: Hospital Evaluation, Financial Variables of Health, Hospital Administrators


Background: Analysis of costs and incomes and analyzing the relationship between current and capital expenditures, attention to cost recovery and changes in investment patterns are of utmost importance in the economy of hospitals. The effective use of financial variables and subsequently performance evaluation of hospitals would help to facilitate the continuation of activities which provides the ground for the economic administration of hospital industry. The purpose of this study was to evaluate the viewpoints of executive administrators of hospitals in Iran to evaluate the feasibility of using financial variables of health in hospitals. Material and Methods: The present study was an applied research which is conducted using AHP (Analytical Hierarchy Process) technique. After extracting the evaluation variables, the financial performance of hospitals was evaluated using the questionnaire which was confirmed by Cronbach’s Alpha equal to 0.85. Moreover, the group of experts in this study included 62 Iranian hospital administrators. Results: Global indices for the economic evaluation of hospitals were identified which were categorized into 9 domains/factors using AHP (Analytical Hierarchy Process); furthermore, they were prioritized regarding the importance and feasibility in hospitals. Conclusion: Utilizing financial variables in evaluating the economic performance of hospitals can determine their economic growth. Moreover, analysis of the current status of hospitals can be used to make strategic decisions and provides a basis for comparisons between hospitals and their rankings. [GMJ. 2016;5(1):25-30]


Gholizadeh M, Jafari M, Janati A, Hosseini S. To analysis the expense of the health services in the Health and Treatment Centers of the Tabriz in 2008. The picture of the health 2012; 3(1): 33-40.

Farzandi Pour M, Asefzade S, Rabiee R. The degree of the compliance to standards of the medical documents unit of the hospitals of Kashan- 2004. The Feyzscientific and research journal of the Medical Science of Kashan University 2006; 10(3): 33-28.

MohtashamAmiri Z, RahimiKolameroodi H, Davoodi A. To analysis the expense of the rural and urban health and treatment centers of the Gilan province. The journal of the medical science of the Gilan University 2008; 67(17): 32-24.

Suarez V, Lesneski C, Denison D. Making the Case for Using Financial Indicators in Local Public Health Agencies. Am J Public Health 2011; 101 (3): 419–25.

Pizzini MJ. The relation between cost-system design, managers' evaluations of the relevance and usefulness of cost data, and financial performance: an empirical study of US hospitals. Accounting, Organizations and Society 2006; 31(2): 179-210.

YazdanPanahi Z, Pour Yazdanparast L, Haghpanah S, Haji Foughaha M. To evaluate the function of the midwives who work in the offices related to the compliance to the professional standards and the effectiveness of the training and permanent evaluation of them in Shiraz. The scientific journal of the Medical Discipline Organization of the Islamic Republic of Iran 2009; 37(1): 31-5.

KaramiMatin B. To evaluate the efficacy of the general training hospitals of the medical science university of Kermanshah, Health Management Journal 2000; 4(8): 30-9.

Smith PC, Elias Mossialos E, Papanicolas I. Principles of performance measurement. Euro Observer 2008; 10(1): 1-4.

Cleverley WO, Cleverley JO. Scorecards and dashboards: using financial metrics to improve performance. Healthcare financial management: journal of the Healthcare Financial Management Association 2005; 59(7): 64-9.

Watson D, Finlayson G, Jacobs P. Comparing apples to apples: the relative financial performance of Manitoba's acute care hospitals. Healthcare management forum 2002; 39-46.

Novick LF, Morrow CB, Mays GP. Public health administration: principles for population-based management. 2 ed. Subbury, Massuchusetts: Jones & Bartlett Publishers 2008.

Groene O, Skau JK, Frølich A. An international review of projects on hospital performance assessment. Int J Qual Health Care 2008; 20 (3): 162-71.

Abdolahian H, Shariati S, ShoushtariZade E. The measurement of the function of the rural management in Iran based on the effective factors on the process of management in the villages of Iran. The quarterly periodical of Human Science Modaress 2007; 3(46): 227-67.

Janati A, Valizadeh S, Asghari-Jafarabadi M. Development of Financial Indicators of Hospital Performance. Journal of Clinical Research & Governance 2014; 3: 92-8.

Vandenberg H. Models of Intellectual Capital Valuation: A Comparative Evaluation. 2003.

Love D, Revere L, Black K. A Current Look at the Key Performance Measures Considered Critical by Health Care Leaders. JOURNAL OF HEALTH CARE FINANCE 2008; 34(3): 19–33.

Pink GH, Holmes GM, D'Alpe C, Strunk LA, McGee P, Slifkin RT. Financial indicators for critical access hospitals. Journal of Rural Health 2006; 22(3): 229-36.

Barak AZ. Cash Flow Ratiosvs. Accruals Ratios: Empirical Research onIncremental Information Content. TheBusiness Review 2010; 15: 206-13.

Holmes GM, Pink GH, Thompson RE, Slifkin RT. Variations in financial performance among peer groups of critical access hospitals. Journal of Rural Health 2007; 23(4): 299-305.

Bazzoli GJ, Chen HF, Zhao M, Lindrooth RC. Hospital financial condition and the quality of patient care. Health Econ 2008; 17(8): 977-95.

Watkins AL. Hospital financial ratio classification patterns revisited: Upon considering nonfinancial information. Journal of Accounting and Public Policy 2000; 19(1): 73-95.

How to Cite
Mirzaei, A., Tabibi, S. J., Nasiripour, A. A., & Riahi, L. (2016). Evaluating the Feasibility of Financial Variables of Health: A Hospital Administrator’s Viewpoint. Galen Medical Journal, 5(1), 25-30. https://doi.org/10.31661/gmj.v5i1.595
Original Article