The General Health District in Mahoning County, Ohio experienced a dramatic financial turnaround after running a basic financial analysis and implementing private sector turnaround strategies. Within two years, the district was taking in more money than it was spending.
Historically, the public health system has lacked a standardized system that local agencies might use to assess their financial stability. Local health agencies are often constrained by their reliance on government funding.
This financial case study describes how the Mahoning Health District applied risk mitigation analysis. Using ratio and trend analysis, the Mahoning Health District identified serious budget deficits in 2006 and 2007. The District then implemented three strategies: (1) retrenchment, (2) repositioning; and (3) reorganization, to climb out of the red.
- Effective financial management requires risk mitigation tools like ratio and trend analysis; without regular risk assessments public health agencies can fail to uphold their mandated functions.
- Ratio and trend analysis isolated two programs that were driving deficits in the Mahoning Health District.
- By 2009, revenue in the Mahoning Health District was increasing at a higher rate than expenditures.
Leaders of public health agencies are stewards of their organizational funds. The Robert Wood Johnson Foundation has developed a Public Health Uniform Data System to support financial stewardship of public health agencies.
The case study presented in this article is a primer on the use of ratio and trend analysis and the implementation of private sector turnaround strategies in a public health organization.