Hospital Financial Information System (HFIS)

Hospital Financial Information System (HFIS)

Introduction

• A Hospital Financial Information System (HFIS) is a subsystem of the overall Hospital Information System (HIS).
• It deals with the collection, processing, storage, and analysis of financial data of a hospital to support decision-making, planning, budgeting, and control.
• It ensures transparency, accountability, and efficient utilization of resources in hospitals, whether private, charitable, or government-run.

Purpose

• To provide reliable financial information for administrators, hospital boards, investors, government agencies, and accreditation bodies.
• To help in cost control, pricing of services, budgetary management, and performance evaluation.

Types of Information in HFIS

1. Revenue-related Information
• Patient billing (OPD, IPD, diagnostics, procedures, pharmacy)
• Insurance claims & reimbursements
• Grants, donations, subsidies
• Miscellaneous revenue (canteen, parking, training courses)
2. Expense-related Information
• Salaries, wages, benefits
• Medical supplies & consumables
• Equipment purchase & maintenance
• Utilities (electricity, water, IT, telecommunication)
• Outsourcing services (housekeeping, security, laundry)
3. Asset-related Information
• Land & building costs
• Medical equipment & furniture
• Investments, endowments, fixed deposits
4. Liability-related Information
• Loans and interest payments
• Accounts payable (vendors, suppliers)
• Accrued expenses
5. Management & Decision-making Information
• Cost per bed, per patient, per test
• Departmental financial performance
• Budget variance analysis
• Break-even point, ROI (Return on Investment)

Features of HFIS

• Integration → Links financial modules with clinical and administrative modules.
• Real-time Processing → Instant recording of financial transactions (e.g., patient billing).
• Accuracy and Transparency → Reduces chances of fraud, leakage, and mismanagement.
• User-friendly Interface → Accessible to both finance staff and administrators.
• Decision Support → Provides dashboards, KPIs, and trend analysis for management.
• Flexibility → Adaptable to different hospital sizes (small nursing homes vs. large tertiary hospitals).
• Compliance → Adheres to accounting standards, taxation, and statutory requirements.
• Security & Confidentiality → Protects sensitive patient billing and donor data.

Daily Reports in HFIS

1. Daily Cash Flow Report – Cash receipts, payments, balance.
2. Daily Billing Report – OPD/IPD collections, pharmacy sales, lab revenue.
3. Daily Collection Report by Department – Surgery, radiology, pathology, etc.
4. Outstanding Payments Report – Pending bills from patients/insurance.
5. Inventory Consumption Report – Daily usage of drugs, consumables, and disposables.
6. Emergency and Special Service Report – ICU, OT, and emergency billing trends.

Monthly Reports in HFIS

1. Monthly Income & Expenditure Statement – Hospital profit or deficit.
2. Departmental Profitability Report – Cost vs. revenue for each department.
3. Monthly Payroll Report – Salary, overtime, allowances.
4. Accounts Receivable Report – Pending payments from insurance/corporate clients.
5. Accounts Payable Report – Payments due to vendors and suppliers.
6. Budget vs. Actual Expenditure Report – Variance analysis.
7. Monthly Balance Sheet & Cash Flow Statement – Financial position of the hospital.

Ratio Analysis in HFIS

·       Ratio analysis is a powerful tool to interpret hospital financial data and evaluate financial health.

·       It compares relationships between different figures from the balance sheet and income statement.

(A) Liquidity Ratios

Measure hospital’s ability to meet short-term obligations.

1. Current Ratio
• Formula:         Current Ratio=Current Assets/Current Liabilities
• Ideal: 2:1
• Example: If current assets = ₹20,00,000 and current liabilities = ₹10,00,000 → Ratio = 2.0
2. Quick Ratio (Acid Test Ratio)
• Formula:

Quick Ratio=Current Assets – Inventory/Current Liabilities

·       Ideal: 1:1

• Example: If inventory = ₹4,00,000, quick assets = ₹16,00,000 → Quick Ratio = 1.6

(B) Profitability Ratios

Show efficiency of hospital in generating profit.

1. Net Profit Ratio
• Formula:         (Net Profit Ratio=Net Profit/Total Revenue)×100

Example: Net Profit = ₹10,00,000, Revenue = ₹50,00,000 → Ratio = 20%

2. Return on Assets (ROA)
• Formula:

ROA=Net Profit/Total Assets×100

Return on Equity (ROE)

• Formula:

ROE=Net Profit/Shareholders’ Equity×100

(C) Turnover Ratios

Indicate how efficiently hospital resources are utilized.

1. Debtors (Receivables) Turnover Ratio
• Formula:

Receivables Turnover=Net Credit Sales/Average Debtors

Higher ratio = faster collection from patients/insurance.

2. Inventory Turnover Ratio
• Formula:

Inventory Turnover=Cost of Goods Consumed/Average Inventory

• In hospitals, it indicates how quickly medicines and consumables are used.

(D) Operating Ratios

Show operational efficiency in managing hospital expenses.

1. Operating Cost Ratio
• Formula:

Operating Cost Ratio=(Operating Expenses/Net Sales)×100

2. Operating Profit Ratio
• Formula:

Operating Profit Ratio=(Operating Profit/Net Sales)×100

Interpretation:

• Lower operating cost ratio → more efficient hospital.
• Higher operating profit ratio → better profitability.

Video Description

·        Don’t forget to do these things if you get benefitted from this article

·        Visit our Let’s contribute page https://keedainformation.blogspot.com/p/lets-contribute.html

·        Follow our page

·        Like & comment on our post

·