Financial Planning and Computer Modelling in a General Hospital

  • E. A. Babington
Conference paper
Part of the Health Systems Research book series (HEALTH)


This paper describes a consultancy assignment carried out on behalf of health care contractors who obtained a contract to run a 500 bed general hospital in the Middle East. The main contractor was a British company, who had the responsibility for the commissioning of the hospital, recruitment of the staff, running a small town providing facilities for the staff, and the management of the hospital for an initial two year period. The Directors of the hospital were keen to ensure that the standards of financial planning and reporting were sufficiently high to convince the government of the country that they were obtaining value for money. It was therefore decided to implement the budgetary planning and control techniques that are common in industry and commerce today, but have not been used to the same extent in the public sector. At the same time it was recognised that there were important differences between budgeting in a business and budgeting in a hospital, in that maximising of the effectiveness of the delivery of health care was not always the same as maximising efficiency in a business sense. However, within these additional quality constraints, it was felt that the hospital should still aim for efficiency in terms of cost, and a programme of budgetary control would assist with the achievement of the hospital’s objectives.


Resource Provider Financial Planning Cost Centre Responsibility Accounting Budgetary Control 
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  1. American Hospitals Association, Budgeting Procedures for Hospitals.Google Scholar
  2. R. Gibbs et al. A Hospital Cost Model for Policy Analysis, Journal of Operational Research Society 1980.Google Scholar
  3. J. Perrin et al. Management of Financial Resources in the National Health Service, Royal Commission on the National Health Service. Research Paper No. 2.Google Scholar

Copyright information

© Springer-Verlag , Berlin Heidelberg 1984

Authors and Affiliations

  • E. A. Babington
    • 1
  1. 1.Peat, Marwick, Mitchell & Co.LondonUK

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