Budgetary performance diversity among Israeli governmental hospitals – Managerial qualifications or possible budget allocation inequity?

Abstract

AbstractPurposeThe paper presents a method to indicate whether diversity in hospitals’ budgetary performance may be (at least partially) attributable to budget allocation inequity rather than to managerial qualification alone.DesignThe null hypothesis was that budgetary performance is solely attributable to managerial capabilities and operational efficiency. If we can introduce and simulate an alternative allocation formula revealing the same or a better overall budgetary performance while it re-ranks hospitals (by budgetary performance) then the null hypothesis may be rejected as this diversity may be attributable (by part) to allocation inequity. We analyzed 11 Israeli governmental general hospitals during 1998–2004. An alternative budget allocation formula was introduced through a mathematical model and was simulated as alternative budget allocation.FindingsBoth budget allocations and actual expenditures strongly correlated with that of the previous year (r2 = 0.99, 0.97, respectively) exhibiting repet...