The results show no significant differences on average length of stay, cost per patient day, or cost per admission among non-profit, government, and for-profit hospitals when controlling for bed capacities, occupancy ...
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The results show no significant differences on average length of stay, cost per patient day, or cost per admission among non-profit, government, and for-profit hospitals when controlling for bed capacities, occupancy rates, number of Medicare/Medicaid days, and hospitals without nurseries. For-profit hospital manhours per patient day were significantly lower than non-profit and government hospitals. This is an important finding because patient-care delivery is labor-intensive. A majority of for-profit hospitals do not have nurseries, which means that they should have more manhours per patient day. As indicated earlier, the manhours for hospitals with nurseries are higher than those for hospitals without nurseries. This indicates cost-cutting behavior on the part of a majority of for-profit hospitals. This method of limiting expenditures by decreasing labor costs associated with certain services is consistent with profit-maximization. The findings of this study with regard to cost differences among non-profit and for-profit hospitals contradict previous research. However, a recent study by Kralewski, Gifford and Porter (1988) noted that whereas ownership, when considered alone, differentiates hospitals, when evaluated within each community, most of the investor-owned and non-for-profit hospital differences disappear. Similar questions have been raised as to whether non-profit hospitals truly differ from for-profit hospitals (Pauly 1987). Caution needs to be exercised in attempting to extrapolate the findings of this study, because of the dynamic health care environment. Hospital ownership changes over time, reimbursement rules affect behavior, and internal factors in organizational operation affect outcomes. These should be considered in future studies exploring organizational mission and cost differences.
Senior managers at large companies may not believe that they can have much impact on the ''bricks and mortar'' of their cost structure. They may even think that occupancy costs are too insignificant to...
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Senior managers at large companies may not believe that they can have much impact on the ''bricks and mortar'' of their cost structure. They may even think that occupancy costs are too insignificant to worry about, too technical to analyze, and too fixed to control. But as real estate consultant Mahlon Apgar argues, occupancy costs can hurt a company's earnings, share value, and overall performance. On the other hand, every dollar saved drops straight to the bottom line. Shearson Lehman Brothers, for example, has found that it can save as much as $20 million annually by reducing occupancy costs in its branch offices and headquarters. Managing occupancy costs isn't easy. But it is timely. As companies strive to improve productivity by consolidating functions and downsizing staff, they are saddled with excess office space. Expansions abroad present completely different market conditions that put a premium on reducing occupancy costs. At the same time, the changing nature of work is challenging deeply held beliefs about the workplace, and, consequently, traditional expectations of office space are giving way to innovations that are less costly and more productive. To manage occupancy costs, managers must be able to identify their components, measure their impact, understand what drives them, and develop options to change them. Four basic tools help diagnose problems: a cost history, a loss analysis, a component analysis, and a lease aging profile. Understanding cost drivers like leasing, location, and layout can give executives the insights they need to reduce occupancy costs while improving the effectiveness of facilities to support day-to-day operations.
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