How do nonprofit hospitals manage earnings?

Earnings Management Around Zero: A motivation to local politician signalling competence

“…Amongst several of the aspects studied, and considering the level of the entity's ability to balance costs with revenue, Stalebrink (2002) believes that politicians have an incentive to report earnings close to zero. In this way, they underline their ability to harmonize the level of costs with income (sustainability) and, as mentioned by Leone and Horn (2005), earnings facilitate the evaluation of political performance with regard to sustainability and resource use. The results of Stalebrink's analysis (2002), mainly based upon regression models with panel data, allowed him to conclude that politicians employ various accounting practices to reach a level of earnings close to zero.…”

“…In accordance with Leone and Horn (2005), high positive earnings can also be interpreted as a deferral, to future periods, of activities aimed at satisfying needs, or even as the incompetence of local politicians managing the available resources or taxes.…”

“…Based on the methodology employed by Burgstahler and Dichev (1997), and apart from the above-mentioned studies by Ballantine et al (2007) and Leone and Horn (2005), the studies conducted by Ferreira et al (2008Ferreira et al ( , 2009aFerreira et al ( , 2009b are consistent with the existence of earnings management. In Portugal, municipalities are now active in more areas.…”

“…Such studies rely on the analysis of the frequency distribution of cross-sectional earnings (earnings variation) to identify earnings management. Ballantine et al (2007) and Leone and Horn (2005) researched non-profit hospitals. The analysis, in both studies, led to the conclusion that, in order to avoid costs related to reporting negative earnings, or excessive positive earnings, hospital managers manage earnings in such a way as to achieve positive earnings close to zero.…”

Do Catalan private hospitals enjoy financial health?

“…D'altra banda, hi ha autors que identifiquen importants diferències en al gestió de centres públics i privats (Leone & Van Horn, 2005), però també altres autors presenten models de gestió que acosten la gestió pública i la privada (Marín, De Rosa & Gómez, 2003). La Central de Resultats del Sistema Sanitari Integral d'Utilització Pública de Catalunya (SISCAT) indica que tot i el difícil context econòmic general en què s'emmarca el sector sanitari a Catalunya en aquests últims anys, els resultats dels hospitals del SISCAT el 2012 a nivell de gestió de centres i de eficiència ha millorat respecte anys anteriors, per la transparència i el rendiment de comptes (Observatori del sistema de salut de Catalunya, 2013), així doncs els hospitals privats catalans també han de tenir voluntat de transparència mitjançant l'anàlisi econòmica financera dels seus comptes anuals, entre d'altres aspectes, objectiu del treball que es presenta.…”