The link between hospital quality and services profitability

Abstract

Purpose

The paper aims to study the relationship between hospital quality and hospital profits for a sample of 88 Alabama hospitals.

Design/methodology/approach

Quality is measured by three groups of procedures performed on newly admitted patients as suggested by the health quality alliance (HQA). Profit is measured for eight hospital services. Regression analyses tested the underlying relationships.

Findings

Quality of care for newly admitted cardiac and pneumonia patients are indicators of quality translatable into profits. Given a choice between the two, the pneumonia procedures were more effective in predicting profits.

Originality/value

As one of the early extensions of the HQA methodology, this paper does demonstrate linkages between quality and profits. Total number of employees was not significant, but governmental versus non‐governmental hospital analyses provide promise for future research.

Citation

Hegji, C.E., Self, D.R. and Findley, C.S.(C). (2007), "The link between hospital quality and services profitability", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 1 No. 4, pp. 290-303. https://doi.org/10.1108/17506120710840143