Assessing the Financial Health of Hospitals Using a Financial Index

In terms of predicting financial distress, hospitals are non-specific entities. This specificity is based on the merging of economic and medical practices. Few studies in this area show that financial stress forecasting tools can be used in hospitals, regardless of the specific nature of these entities. For these purposes, an index of financial health for hospitals, H’index, was constructed. This index is a tool for assessing the financial health of healthcare providers. It was built on the basis of the economic data of Czech hospitals. The aim of this study is to verify the validity of H’index using the steady-state method TOPSIS. The data from 2015, which are the most recent available for the purposes of this research, were selected for verification. The results show consistency using H’index and the TOPSIS method. The research presents the possibility of using the financial index H’index for the healthcare sector. It is designed to support the decision-making process of hospital management and to support the auditors. Other researchers can work with this tool as well.