Discrepancies in Hospital Financial Information: Comparison of Financial Data in State Data Repositories and the Healthcare Cost Reporting Information System

64 Pages Posted: 24 Mar 2018 Last revised: 11 Jul 2018

See all articles by Melvin A. Lamboy-Ruiz

Melvin A. Lamboy-Ruiz

Iowa State University

Won Gyun No

Rutgers, The State University of New Jersey - Accounting & Information Systems

Olena V. Watanabe

Iowa State University - Debbie and Jerry Ivy College of Business

Date Written: May 15, 2018

Abstract

High-quality financial data are important to stakeholders in the healthcare sector but are difficult to obtain. The two data sources most often used are hospital financial statements (HFSs) and Medicare Cost Reports (MCRs). Applying an analytical framework of data information quality dimensions, we compare a sample of 34,728 instances of 12 financial statement items extracted from HFSs and MCRs filed from 2007 through 2011. Our comparison shows a nontrivial frequency of missing items, widespread discrepancies across financial items, and a materiality of discrepancies that is significant in both sources. We also find many avoidable computational errors and significant absolute relative discrepancies between the sources. Additionally, we perform replications of two prior studies to test the believability of HFS and MCR data. Although we cannot conclude which source is more accurate, we do alert users of hospital financial data to the comparative potentials and limitations of these two major sources.

Keywords: data and information quality; Medicare Cost Report; financial statement; state data repository; hospital

JEL Classification: M40, M49, I19, C80, C81

Suggested Citation

Lamboy-Ruiz, Melvin and No, Won Gyun and Watanabe, Olena V., Discrepancies in Hospital Financial Information: Comparison of Financial Data in State Data Repositories and the Healthcare Cost Reporting Information System (May 15, 2018). Journal of Information Systems, Forthcoming . Available at SSRN: https://ssrn.com/abstract=3144779 or http://dx.doi.org/10.2139/ssrn.3144779

Melvin Lamboy-Ruiz (Contact Author)

Iowa State University ( email )

College of Business
Ames, IA 50011-2063
United States
5152947161 (Phone)

Won Gyun No

Rutgers, The State University of New Jersey - Accounting & Information Systems

1 Washington Park, Room 993
Newark, NJ 07102-3122
United States

Olena V. Watanabe

Iowa State University - Debbie and Jerry Ivy College of Business ( email )

613 Wallace Road
Ames, IA 50011-2063
United States

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