Biomaterial Database

Hospital free cash flow. 1991

R T Kauer, and J B Silvers

Weatherhead School of Management, Case Western Reserve University, Cleveland, OH.

Hospital managers may find it difficult to admit their investments have been suboptimal, but such investments often lead to poor returns and less future cash. Inappropriate use of free cash flow produces large transaction costs of exit. The relative efficiency of investor-owned and tax-exempt hospitals in the product market for hospital services is examined as the free cash flow theory is used to explore capital-market conditions of hospitals. Hypotheses concerning the current competitive conditions in the industry are set forth, and the implications of free cash flow for risk, capital-market efficiency, and the cost of capital to tax-exempt institution is compared to capital-market norms.

UI	MeSH Term	Description	Entries
D007182	Income	Revenues or receipts accruing from business enterprise, labor, or invested capital.	Income Distribution,Income Generation Programs,Savings,Distribution, Income,Distributions, Income,Income Distributions,Income Generation Program,Incomes,Program, Income Generation,Programs, Income Generation
D007449	Investments	Use for articles on the investing of funds for income or profit.	Investment
D010067	Ownership	The legal relation between an entity (individual, group, corporation, or-profit, secular, government) and an object. The object may be corporeal, such as equipment, or completely a creature of law, such as a patent; it may be movable, such as an animal, or immovable, such as a building.	Property Rights,Property Right,Rights, Property
D002202	Capital Financing	Institutional funding for facilities and for equipment which becomes a part of the assets of the institution.	Financing, Capital,Funding, Capital,Capital Financings,Capital Funding,Capital Fundings
D003862	Depreciation	Decline in value of capital assets of a permanent or fixed nature over time with use.	Depreciations
D004467	Economics	The science of utilization, distribution, and consumption of services and materials.	Consumer Price Index,Capital,Conditions, Economic,Consumption,Cost of Living,Easterlin Hypothesis,Economic Conditions,Economic Policies,Economic Policy,Economics, Home,Home Economics,Household Consumption,Macroeconomic Factors,Microeconomic Factors,Policies, Economic,Policy, Economic,Production,Remittances,Utility Theory,Condition, Economic,Consumer Price Indices,Consumption, Household,Economic Condition,Factor, Macroeconomic,Factor, Microeconomic,Factors, Macroeconomic,Factors, Microeconomic,Household Consumptions,Hypothesis, Easterlin,Index, Consumer Price,Indices, Consumer Price,Living Cost,Living Costs,Remittance,Theories, Utility,Theory, Utility,Utility Theories
D004526	Efficiency	Ratio of output to effort and or resources, or the ratio of effort and or resources produced to energy expended.	Productivity
D005377	Financial Management, Hospital	The obtaining and management of funds for hospital needs and responsibility for fiscal affairs.	Hospital Financial Management,Hospital Financial Managements,Financial Managements, Hospital,Management, Hospital Financial,Managements, Hospital Financial
D006777	Hospitals, Proprietary	Hospitals owned and operated by a corporation or an individual that operate on a for-profit basis, also referred to as investor-owned hospitals.	Hospitals, Private, Investor-Owned,Hospitals, Private, for-Profit,Private, Investor-Owned Hospitals,Private, for-Profit Hospitals,Proprietary Hospitals,Hospital, Proprietary,Proprietary Hospital
D006788	Hospitals, Voluntary	Private, not-for-profit hospitals that are autonomous, self-established, and self-supported.	Hospitals, Private, Not-for-Profit,Hospitals Privates, Not-for-Profit,Not-for-Profit Hospitals Private,Not-for-Profit Hospitals Privates,Private, Not-for-Profit Hospitals,Voluntary Hospitals,Hospital, Voluntary,Hospitals Private, Not-for-Profit,Hospitals Privates, Not for Profit,Not for Profit Hospitals Private,Not for Profit Hospitals Privates,Private, Not for Profit Hospitals,Privates, Not-for-Profit Hospitals,Voluntary Hospital