Does Altman's z-score predict the economic viability of health maintenance organisations?

Martha E. Jennings, Frank J.D. Cavico, Pan Yatrakis and Daniel Austin

International Journal of Electronic Finance, 2009, vol. 3, issue 1, 96-114

Abstract: A history of the successful containment of healthcare costs, in addition to the federal government's endorsement of managed care, attributed to increasing numbers of Health Maintenance Organisations (HMOs) over the past 20 years. Unfortunately, with the increase in the number of organisations, there has been an increase in the number of financial failures. This paper examines the applicability of Altman's revised four-variable z-score model, a bankruptcy prediction tool designed to forecast financial failure utilising the electronically published financial data of HMOs. This research represents a seminal study in the service sector of health insurance companies that will benefit stakeholders.

Keywords: bankruptcy prediction; health maintenance organisations; health maintenance failure; electronic finance; e-finance; financial failure; Altman; z-score; bankruptcy theories; company failure; forecasting; corporate failure; managed care; economic viability; healthcare costs; health insurance companies; insurance services. (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijelfi:v:3:y:2009:i:1:p:96-114

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