Competitive Strategy for Successful National University Hospital Management in the Republic of Korea

OBJECTIVES This study provides information to aid decision making for managers and the staff of national university hospitals through analyzing their financial statements. METHODS In order to analyze the finances of national university hospitals, this study used the report of final accounts announced by each hospital from 2009 to 2012 as baseline data. The research participants were 10 national university hospitals. RESULTS According to the results of the analysis, most hospitals (except for a few) had medical expenses exceeding their medical revenues, resulting in a net deficit; however, there were significant differences amongst the hospitals. The result of adjustments based on a standard size of 100 beds showed that most hospitals had medical revenue deficits, and there were significant differences between hospitals in terms of medical revenues and medical costs. CONCLUSION It is not clear whether an expansion of national university hospitals is always beneficial for increasing net revenues, and it is necessary to establish a differentiation strategy to increase profitability by securing financial soundness instead of externally-oriented growth.