Impact of Medical Waste

Chapter 1: Introduction

1.1 Research Background

Medical waste creates an adverse impact on the well-being of an organization. By reducing the medical wastage from the hospital premises, healthcare organizations can improve the quality of their services, which positively impacts productivity. Besides, due to the increment of medical wastage, a growing trend is observed in the medical cost. Therefore, for enhancing the performances of an organization, every healthcare organization should emphasize the reduction of waste. Medical staffs and administrative bodies of a healthcare organization should work together to reduce the wastage while giving services (Al-Habash and Al-Zu'bi, 2012). This study analyzes the impact of waste, especially medical waste, on the financial performance of medical service provider organizations.

1.2 Rationale of the Paper

Before making decisions for the reduction of wastage in improving the overall performance, management personnel of every healthcare institute should understand the connection between medical wastage and organizational performance. This study is allowing managerial associates of health care organizations to gather information about the impact of wastage on business performance. Before critically analyzing this factor, this definite research work tries to portray the current market position of health care organizations and also defines their financial performance. For understanding the overall impact of waste on business performance, this study has chosen five health care organizations (Lee, Lee, and Schniederjans, 2011). Therefore, this study helps management personnel of healthcare organizations to understand the adverse impact of waste on the overall activities. After knowing this aspect, management can be able to take suitable measures to reduce the wastage in the production chain for enhancing financial performance.

1.3 Research Problem

The problem statement of this research work is to determine the effect of medical wastage on the financial performance of hospitals. With the help of this study, administrative bodies of health care organization can be able to understand this fact and make effective measures and decisions for reducing waste-related problems and generating a positive impact on the financial performance. Therefore, it can be said that this research work plays a significant role in the medical research field because this study guide medical professionals to understand the adverse impact of medical waste on the organizational performance and wellbeing of patients.

1.4 Aim and Objectives

Financial performance of an organization depends upon various factors, and among those numerous factors, organizational wastage is a promising component. This empirical research work tries to find out the impact of waste on the financial performance of hospitality service provider organizations, which is considered as the aim of the study. For meeting the purpose, two objectives have been set, which are as follows:

To critically understand the financial performance of the hospitality industry from existing research studies and annual reports

To study the relationship between medical waste and financial performance of hospitals

1.5 Research Questions

Without constructing coherent research questions, this study cannot attain the set aim and objectives efficiently. Due to this, the researcher of this definite research work has created specific and clear research objectives for assisting him in attaining the fruitful result of this study. Two main research questions have been designed by the researcher to research the same domain.

What is the current financial performance of the hospitality sector, especially hospitals?

What is the current financial performance of the hospitality sector, especially hospitals?

1.6 Research Methodology

Without designing data collection and data analysis portions, this study cannot attain the research requirements. Due to this, the researcher of this paper focuses on theses portions. Before planning the data collection process, every scholar should select the correct research approach for their study. Understanding the critical requirements of this study, it can be said that the quantitative research strategy is the most fruitful approach for this formal study (Kumar, 2019). For this study, five hospitals have been selected, which are Cambridge University Hospitals NHS Foundation Trust, North Middlesex University Hospitals NHS Trust, Chelsea and Westminster Hospital NHS Foundation Trust, Queen Elizabeth Hospital King’s Lynn NHS Foundation Trust, and King’s College Hospital NHS Foundation Trust. Before collecting financial data from the annual reports of these five hospitals, the research analyst has taken permission from the governing bodies of these organizations. After receiving a positive response, the scholar has accumulated financial data from the annual reports of these selected five hospitals, which assist the researcher in understanding the impact of medical waste on economic performance (Clandinin, Cave, and Berendonk, 2017). For calculating financial returns, this study used ration analysis techniques. It also helps to understand the connection of waste and performance of an organization, especially financial performance. Apart from this, by using analytical skills, the scholar can find out the relationship between medial wastage and financial performance (Kumar, 2019). After completing the analysis, this study can also provide specific recommendations to the management people of these organizations to reduce medical waste for enhancing their overall performance.

2.0. Literature Review

2.1 Overview

This study critically analyzes the financial statement of the five hospitals from 2015 to 2019 for its economic advantages and the comparative analysis among them. The data are collected from the financial statement of these hospitals and with the help of several journals, books, and articles provided by the respective governments. This study also includes the impact of the waste on these hospitals financially. This study provides a clear conceptual structure based on the data, which are provided.

2.2 Position of Phenomenology

According to Margit (2018), the health care industry has increased its GDP every year, from 9.2% to 12.4%. The health care industry had changed by the standardized costing reimbursement, according to him. Leslie, Hema, Ranjani (2017) stated that the organizational objective is different for the various type of hospitals for the mixed industry. The pricing structure of the hospital industry is highly regulated, according to them.

2.3 Data Collection

It is already discussed that the primary or quantitative method is applied to collect the data for this study. The financial statements of five hospitals from 2015 to 2019 are analyzed to collect the data for the financial ratios. The different and recent journals, books, and government articles are used to manage the data for this study.

2.4 Data Analysis

After collecting data from the financial statement of these hospitals, this study analyzes the financial position of these hospitals with the help of different ratios. The calculated data are gathered and explained with the help of graphs, charts, and tables. At the same time, the articles, books are journals that are used to discuss and analyze the impact of the waste in the financial conditions of these hospitals.

2.4.1 Turnover Ratio of Cambridge University Hospital

According to Boyas and Teeter (2017), the turnover ratio is calculated to compare the values of total sale with the total asset of this hospital. This ratio helps to determine the efficiency of this hospital by utilizing its assets to earn revenue. This ratio determines the performance of this hospital.

The above table shows the asset turnover ratio of Cambridge University Hospital from 2015 to 2019. From this table, it is clear that this hospital has increased its sales by utilizing its assets over the years.

The above table shows that the working capital ratio of this hospital. It indicates that this hospital has increased its cash flow from its annual revenue.

2.4.2 Liquidity Ratio of Chelsea and West Minster Hospital

Liquidity helps the ability to pay the debt, which is, became due. Bebu and Lachin (2016) stated that this is the ability of this hospital to convert the current asset to its equivalent cash to pay to debt.

The above table shows the current ratio of Chelsea West Minister Hospital from 2015 to 2019. This ratio indicates that this hospital increases its ability to pay the liquid debt over the years.

This ratio clearly shows that this hospital has improved its ability to cover the current debt obligations by the liquid asset.

2.4.3 Solvency Ratio of King’s College Hospital

Aman (2016) stated that the solvency ratio helps to understand the ability of this hospital to pay its long term and short-term debt.

The above table shows the debt to equity ratio of the King’s College Hospital from 2015 to 2019. This ratio indicates that this hospital improved its ability in 2016 compared to the other years. The lowest ability was in 2015. The ability to pay the long-term debt from its equity is very marginal in 2019.

The above table shows the debt to asset ratio of this hospital for five years. This ratio indicates that this hospital has decreased its ability to pay its long-term debt based on its assets.

2.5 Industry and Company

The health care industry of the United Kingdom has a total of more than £70 billion turnovers in the current year. This study provides the data of different ratios from five various hospitals for analyzing. The UK is the global leader in the health care industry.

2.5.1 Cambridge University Hospital

Asset turnover ratio of this hospital is given below

The above graph clearly shows that the asset turnover ratio of this hospital has increased in all the years compared to its base year, which is 2015. According to Jalbert (2017), this hospital has improved its utilization of asst significantly to increase the income level.

The working capital ratio of this hospital is given below

The above graph represents the working capital ratio of this hospital. From the chart, it is clear that this hospital has more cash flow in 2018 compared to the other years. Gabric (2018) stated that the utilization of cash flow to increase the profitability margin has decreased in the current year.

The acid test ratio is given below

According to Bragg (2018), from the above graph, it is clear that this hospital has the highest ability to pay the current liabilities with the help of the current asset in 2019. The value of this ratio has increased in both 2018 and 2019 compare to its base year and the other years.

2.5.3 North Middlesex University Hospital

The p/l ratio of this hospital is showing below

According to Bragg (2018), from the above graph, it is clear that the profit margin has decreased over the year based on its loss margin. Both 2018 and 2019 share a similar type of result, which indicates that this company has less profit margin compare to its loss value.

2.5.4 Queen Elizabeth Hospital King’s Lynn

The gross profit margin of this hospital shows below

According to Bragg (2018), from the above graph, it is clear that the gross profit margin had significantly increased in 2017, but it has decreased since then. The value of the current year has fallen from its previous year and the base.

The net profit margin of this hospital is given below

From the above graph, it is clear that this hospital earned its net profit margin in 2017 at the highest level. The value has a downward direction in the coming year, which is 2018. The profit margin has improved in the current year compared to the base and previous year.

2.6 Impact of Waste

Waste in the health care industry in an ongoing issue. The hospitals have wasted their funds, and they cannot invest in new technologies and infrastructure. The hospitals of the total have the wastage of more than £50 billion. This is a considerable amount for the hospitals. This amount has increased every year by more than 30% According to the Towner (2019). These hospitals have increased their risk factors, and it faces difficulties in finding new investors. Hospitals are facing problems adopting the new trend of technologies and the changing nature of the techniques in the health care industry due to the enormous waste amount. This waste inn financial plays a negative role in the health care industry of the UK.

2.7 Summary

Based on the analysis of this study, it is clear that the hospitals, which are used in this study, are financially secure and stable. There is no negative value from the ratio analysis of this study, which indicates that all the hospitals are improving in terms of their financial condition. The waste of the health care industry plays a negative role in this sector. Most of the financial aspect is seen as a downward graph due to this. The hospitals should use the cheaper and quality construction for its improvement of infrastructure. Fuentes (2017) stated that this industry should implement the tax-exempt bond for more reasonable and affordable borrowings. This should help them to improve their waste management.

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