Abstract
Purpose. The purpose of this study was to examine cash management practices in hospitals within the Los Angeles County and the problems they encounter in managing their cash. Based upon the findings, a model was proposed that would help the referenced hospitals and similar organizations in their cash management. Method. A cash management check-list was developed and field tested by the researcher. Other information used in the analysis was generated from both interviews and questionnaires of one hundred and fifty one (151) people in one hundred and fifty one (151) Los Angeles County hospitals under study. Eight people were interviewed in the finance/accounting department of eight hospitals while one hundred and forty three people were contacted by questionnaire in the remaining hospitals. Of the total number of people contacted, forty-one people declined to participate. With the questionnaires, the participants were limited to written responses to twenty-eight multiple choice questions on cash management. Interviews were used to allow for a more in-depth look at the questions. The responses from both the interviews and questionnaires were analyzed in tables in relationship to the cash management check-list. Findings. Results indicated that: (1) cash management practices differed in hospitals within the Los Angeles County; and (2) the major problem facing the hospitals was inadequate cash inflow to off-set the cash outflow. Conclusions and recommendations. (1) The cash management theory should be used as a guide line for hospitals' cash management practices. (2) Hospitals should improve the in-house bill processing procedure to increase the rate at which they will be able to submit bills to both third party payers and self-responsible payers. (3) There should be in-service training in the area of bill processing which should be based upon the policy or need of a hospital. (4) A system should be established to promote the sharing and discussion of the in-house bill processing method as a collaborative effort toward improvement. The following recommendations are offered for further research: (5) Repeat this study with hospitals in other counties. (6) Repeat this study to include other organizations, such as commercial industries. (7) Repeat this study with hospitals in a third world country. (8) Study the effects of the use of in-house bill processing time period on cash inflow.