Financial viability measures for hospitals and healthcare systems. 2000 Healthcare Financial Management Resource Guide, 9-13. The rural hospital is the only access to healthcare for many rural residents. However, these hospitals' financial viability is increasingly jeopardized because of decreasing reimbursements, inability to cost shift, underutilization, and over-regulation. According to their report, hospital's financial statements include many key financial indicators.
Net income is defined as revenue minus expense.
Liquidity and cash flow is the provider's ability to meet short-term financial obligations. Even with good financial margins, providers need enough cash assets, to meet near-term obligations to employees, vendors and creditors. Otherwise, they may experience financial crises that require selling investments or arranging credit under unfavorable terms, both of which weaken the hospital's viability. Debt burden is an organization's reliance on long-term debt to finance its assets. Financing debt can extend a hospital's capabilities, but as debts rise, so does the risk of not being able to pay those debts.