Assessment of the Financial Stability of the Diagnostic-consultative Centres in Varna

Abstract

The Diagnostic-Consultative centres' management teams can benefit from applying financial analysis methods. One of these methods is the calculation of Altman's Z-score. This analysis can be vital in guiding management decisions to improve financial stability and thus contribute to high-quality medical services. Our study aims to assess the financial stability of the diagnostic-consultative centres in Varna based on the calculation of their Altman Z-score. The study design includes all nine Diagnostic-Consultative centres (DCC) in Varna- 6 of which are municipally owned, two are privately owned, and one is state-owned. The study period is 2018-2021, and for each year of the period and each of the medical institutions, based on information from their financial reports, Altman Z-score was calculated. For one of the DCCs, with private ownership of the capital, the necessary information to calculate the indicator is missing, so it is excluded from the study. The results show that the DCCs with a Z-score lower than 1.8 for 2018 are five, four for 2019, and three for 2020 and 2021. For six of the eight analysed healthcare centres, the indicator's value increased over the period, and the financial situation improved and stabilised. The average value of the indicator for the whole group of medical institutions increases from 0.25 in 2018 to 2.84 in 2021. The indicators used in calculating the Z-score are critical in determining the financial health of medical institutions, so the dynamic of the Z-score is an essential indicator that the management of medical institutions should monitor.