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Bad Debt (bad + debt)

Distribution by Scientific Domains

Medical Sciences	33%
Humanities and Social Sciences	33%
Business, Economics, Finance and Accounting	33%

Selected Abstracts

SOUTH AFRICA: Bad Debts are on the Rise

AFRICA RESEARCH BULLETIN: ECONOMIC, FINANCIAL AND TECHNICAL SERIES, Issue 2 2009
Article first published online: 7 APR 200
No abstract is available for this article. [source]

Lessons from a microfinance recapitalisation programme

DISASTERS, Issue 2 2010
Angus Poston
Following a major disaster, microfinance institutions (MFIs) often face high levels of bad debt, which may require the institutions to be recapitalised. This paper describes a recapitalisation programme implemented by the SANASA movement of Sri Lanka in 390 microfinance societies following the December 2004 tsunami, and highlights lessons for other similar programmes. MFI recapitalisation is a good use of funds in post-disaster situations. To create successful programmes, donors should expect to relax some of their usual project requirements and MFIs should focus on maintaining credit discipline. [source]

Alternative Funding Policies for the Uninsured: Exploring the Value of Hospital Tax Exemption

THE MILBANK QUARTERLY, Issue 2 2000
Nancy M. Kane
The tax exemption accorded private, nonprofit hospitals is being subjected to more scrutiny as the numbers of uninsured grow; meanwhile, charity care competes with market-driven priorities. Current public policies tie hospital tax exemption to the provision of charity care, but there is a gap in the size and distribution of values between tax exemption and the charity care that is provided. Most hospitals, in a study reported here, provided free care at a level below the value of their tax exemption, even when 50 percent of bad debt was included in the care value. However, hospitals in the poorest communities offered considerably more care than the value of their tax exemption, whereas those in wealthier communities offered considerably less. Policies at local, state, and federal levels should be designed to exert leverage on hospitals to provide free care at a level commensurate with the value of their tax exemptions. [source]

Financial Impact of Emergency Department Ultrasound

ACADEMIC EMERGENCY MEDICINE, Issue 7 2009
Olanrewaju A. Soremekun MD
Abstract Objectives:, There is limited information on the financial implications of an emergency department ultrasound (ED US) program. The authors sought to perform a fiscal analysis of an integrated ED US program. Methods:, A retrospective review of billing data was performed for fiscal year (FY) 2007 for an urban academic ED with an ED US program. The ED had an annual census of 80,000 visits and 1,101 ED trauma activations. The ED is a core teaching site for a 4-year emergency medicine (EM) residency, has 35 faculty members, and has 24-hour availability of all radiology services including formal US. ED US is utilized as part of evaluation of all trauma activations and for ED procedures. As actual billing charges and reimbursement rates are institution-specific and proprietary information, relative value units (RVUs) and reimbursement based on the Centers for Medicare & Medicaid Services (CMS) 2007 fee schedule (adjusted for fixed diagnosis-related group [DRG] payments and bad debt) was used to determine revenue generated from ED US. To estimate potential volume, assumptions were made on improvement in documentation rate for diagnostic scans (current documentation rates based on billed volume versus diagnostic studies in diagnostic image database), with no improvements assumed for procedural ED US. Expenses consist of three components,capital costs, training costs, and ongoing operational costs,and were determined by institutional experience. Training costs were considered sunken expenses by this institution and were thus not included in the original return on investment (ROI) calculation, although for this article a second ROI calculation was done with training cost estimates included. For the purposes of analysis, certain key assumptions were made. We utilized a collection rate of 45% and hospitalization rates (used to adjust for fixed DRG payments) of 33% for all diagnostic scans, 100% for vascular access, and 10% for needle placement. An optimal documentation rate of 95% was used to estimate potential revenue. Results:, In FY 2007, 486 limited echo exams of abdomen (current procedural terminology [CPT] 76705) and 480 limited echo cardiac exams were performed (CPT 93308) while there were 78 exams for US-guided vascular access (CPT 76937) and 36 US-guided needle placements when performing paracentesis, thoracentesis, or location of abscess for drainage (CPT 76492). Applying the 2007 CMS fee schedule and above assumptions, the revenue generated was 578 RVUs and $35,541 ($12,934 in professional physician fees and $22,607 in facility fees). Assuming optimal documentation rates for diagnostic ED US scans, ED US could have generated 1,487 RVUs and $94,593 ($33,953 in professional physician fees and $60,640 in facility fees). Program expenses include an initial capital expense (estimated at $120,000 for two US machines) and ongoing operational costs ($68,640 per year to cover image quality assurance review, continuing education, and program maintenance). Based on current revenue, there would be an annual operating loss, and thus an ROI cannot be calculated. However, if potential revenue is achieved, the annual operating income will be $22,846 per year with an ROI of 4.9 years to break even with initial investment. Conclusions:, Determining an ROI is a required procedure for any business plan for establishing an ED US program. Our analysis demonstrates that an ED US program that captures charges for trauma and procedural US and achieves the potential billing volume breaks even in less than 5 years, at which point it would generate a positive margin. [source]

The product differentiation hypothesis for corporate trade credit

MANAGERIAL AND DECISION ECONOMICS, Issue 6-7 2003
George W. Blazenko
The product differentiation hypothesis for trade credit says that business managers use trade credit like advertising to differentiate their products. Prior studies of this hypothesis conclude that higher profit margins induce firms to increase trade credit and vice versa. We better represent the relation between the cost of bad debts and the price of the product offered on credit. When prices are higher, firms suffer greater losses from non-payment. Our model shows that, contrary to early versions of the product differentiation hypothesis, when managers adjust trade credit and profit margins for a perturbation in marginal cost, optimal profit margin and trade credit may move in opposite directions. A manager maintains revenue for price elastic demand by moderating the price increase, which decreases profit margin. At the same time, the manager also increases trade credit, which serves to maintain revenue by encouraging product demand. We report evidence of a negative relation between corporate receivables and profit margin. Copyright © 2003 John Wiley & Sons, Ltd. [source]

Theories of Soft Budget Constraints and the Analysis of Banking Crises

THE ECONOMICS OF TRANSITION, Issue 1 2000
Janet Mitchell
This paper proposes a new taxonomy for classifying models of soft budget constraints which allows identification of two classes of models. Distinguishing between these classes of models is useful, as they yield SBCs in differing circumstances and have differing theoretical and policy implications. The taxonomy is used to motivate an area of economic theory in which SBC models can yield novel insights: the analysis of banking crises. A model is presented in which SBCs arising from creditor passivity have implications for the question of the appropriate policy for dealing with bad debts on troubled banks' balance sheets. The paper also compares the implications of the two classes of SBC models for the analysis of banking crises. [source]