Quantitative Examinations Using Financial and Operational
Ratio Analysis to Improve Quality in Public Health

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MODERATOR:
Peggy Honoré, D.H.A., M.H.A.

PANELISTS:
Matthew Stefanak, M.P.H.

Using Financial Ratios in a Local Public Health Department to Improve Performance

Effective Financial management systems go beyond simply documenting compliance with reporting requirements. Most importantly they also focus on routinely producing integrated financial, program, and budget information that is needed to effectively support systematic performance measurement. A financial management pilot project was conducted in a mid-size local public health department in Ohio. Using a set of public health financial indicators developed by the Robert Wood Johnson Foundation-supported Public Health Finance Steering Committee, financial ratios were calculated to trend financial and operational performance in three consecutive years. Results revealed information that was beneficial to assessing financial status and for making proactive operational and financial modifications as the local health department began to encounter financial difficulties at the beginning of the current recession. More widespread use of this standardized set of financial ratios will enable local health departments to benchmark their performance with peer organizations and assess the extent to which their financial resources are spent on mission-critical functions.

Matthew Dillon, B.S.

Viewing Public Health Financial Information from a Different Perspective: Financial Ratio Analysis in Florida

A collaborative financial management survey was taken of various size county public health departments in Florida for a three-year period and specific financial ratio analysis was applied to all participating counties in the same manner. Results indicate that trending the information over a period of time may prove valuable long term not only within a single state but eventually benchmarking by comparing to other county health departments nationwide for planning, sharing best practices or funding strategies. People and programs drive the success of public health in America, but finances sustain the process. Emphasis and improved financial accountability will stretch our dollars farther and possibly help pave a better path for driving preventive health further into our communities.

Peggy Honoré, D.H.A., M.H.A.

Utilizing Ratio and Trend Analysis as a Quality Improvement Tool

In August 2008, HHS issued a Consensus Statement on Quality in the Public Health System. Nine aims for improvement of quality in the public health system were introduced. This session will demonstrate the value-added when the aims for quality improvement are paired with quantitative ratio and trend analysis in public health. Ratio and trend analysis is a highly recognized standard for quantitative methodology for examinations of financial and operational performance. It is a fundamental finance concept that has been practiced routinely in health care and virtually every other industry during the 20^th century. Information gained through these practices are used to inform decision makers by identifying financial as well as operational strengths and weaknesses and build strategic direction. This Panel will present two cases studies representing state and local public health and will provide insights on how the analysis can inform systems for quality improvement.