Enhancing Financial Resilience of Public Hospitals in China: A Dynamic Capability Approach to Addressing VUCA Challenges

Zhang Tongtong, Yvonne Joseph Ason, Jamaliah Said and Nor Balkish Zakaria
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Zhang Tongtong: Faculty Accounting, Universiti Teknologi MARA (UiTM)
Yvonne Joseph Ason: Faculty Accounting, Universiti Teknologi MARA (UiTM)
Jamaliah Said: Accounting Research Institute, Universiti Teknologi Mara (UiTM)
Nor Balkish Zakaria: Accounting Research Institute, Universiti Teknologi Mara (UiTM)

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 10, 3284-3294

Abstract: The incidence of public health emergencies is rising in the context of Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). This results in a scarcity of healthcare resources and service disruptions, significantly impacting public lives, safety, and health rights. Financial resilience is crucial for the sustainable provision of critical medical services amid interruptions, especially for public hospitals, which serve as the foundation of the national healthcare system. This study utilized dynamic capacity theory to analyze the impact of essential dynamic capcapability (revenue diversification capability, cost adjustment capability, budget flexibility, and financial informatization) on the financial resilience of public hospitals in China. 205 responses were collected from hospital management and staff. The collected data were analyzed using the Structural Equation Modeling Partial Least Squares (SEM-PLS) approach. The results indicate that revenue diversification and cost adjustment capability positively and significantly influence the financial resilience of public hospitals, addressing the theoretical gap in this area within developing countries and aiding public healthcare decision-makers in strengthening the financial resilience of public hospitals through enhanced revenue diversification and cost adjustment capcapability.

Date: 2024
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