The nineties managerial reforms have introduced changes in the public organizations’ accounting information system, emphasizing the need for measures of efficiency, timeliness, quality, outcome, etc. (Hood, 1995; Marcon and Panozzo, 1998). These changes have been explained by their proponents in terms of improving organizational accountability and improving decision making (Coy et al., 1997; Lawrence et al., 1997). Accountability has resulted to be a key principle in the public sector, which has affected the way reporting is organized and designed. As argued by Steccolini (2004), accountability is a multifaceted and complex concept that evolves as social and cultural values change. The citizens’ increasing awareness of the sustainable development principles, for example, has determined a progressive pressure on social and environmental disclosure, bringing private and public organizations to change their reporting practices. Thus, some public organizations have started to disclose sustainability reports, social report, gender report, etc., determining a voluntary change in their practice. Some organizations have also changed the information disclosed through their annual report, as remarked by Neu et al., (1998). Churet and Eccles (2014) found that healthcare is one of the sectors with the higher proportion of organizations integrating the annual report with non-financial information. However, studies about the combination of financial and extra-financial information in the annual report of public sector’ organizations remains a quite under-investigated field. In this sense, studies on Integrated Reporting (IR) practices within public organizations are few (Dumay et al., 2016) but highly recommended (see for e.g. Adams, 2015). This pattern can be recognized also with reference to the Italian setting, where regulations are increasingly requiring companies to integrate financial and non-financial information, while in healthcare there is no evidence of IR approach. Whether IR would be implemented in the Italian public healthcare sector, additional concerns may be related to the role of the annual report in disclosing organizational performance and providing useful information for decision making. In fact, a national regulation (D.Lgs. 118/2011) has defined the structures and contents of the annual report to be delivered by the healthcare organizations (HCOs) to disclose and communicate their results. In particular, the regulation assigns a specific objective to the annual financial report: “to disclose information related to future actions, to actions in progress, to the ongoing situation, to those actors interested in political, social and financial decision making processes” (Article 9). However, Italian public organizations have been found to create those reports mainly to comply with legal requirements, thus providing poor quality reports mainly received by internal users (Steccolini, 2004). This challenges the role that annual reports have as accountability mean (Steccolini, 2004), and how they can be potentially used as integrated reporting practices combining financial with extra-financial information. Therefore, questions may be raised concerning the actors who are actually interested in this disclosure and for which purposes. Based on the above premise, the paper aims at exploring how management report is framed in the public healthcare sector, and whether an IR practice, as currently raised by the accounting discipline (Cima, 2016) would contribute or not to improve decision making and the public accountability. More in depth, through an exploratory case study undertaken in a public university hospital, the research enters the debate about the adoption of an IR approach in healthcare and deepens both internal and external actors’ perspectives about the need to integrate healthcare organizations’ disclosure with non-financial information. Thus, the research depicts the scenario of the information disclosed by healthcare organizations in the annual report, and deepens whether the integration of additional non-financial dimensions would contribute to report the value creation by healthcare organizations. The paper contributes to literature addressing the call for a deeper investigation of space for IR approaches in the public sector, narrowing the focus on healthcare (Adams, 2015; Dumay et al., 2016). In particular, the research consists in a first attempt to explore the possibilities for the implementation of IR in the Italian healthcare sector. This paper adopts a double perspective, that includes both investors and internal actors’ point of view shedding light on the different perceptions those actors have on the management’ reports combining financial and extra-financial information as a form of prior IR, and the eventuality to introduce within the investigated university’ hospital an IR ex-novo to disclose organizations’ value creation. To this line, the paper aims at addressing the call of Atkins and Maroun (2015) to address broader groups of stakeholders, other than capital providers to analyse integrated reporting practices adopted by organizations. The paper is structured as follow: the next section provides a general overview of IR practices and explores the literature in the field. The third section deepens the state of the art of reporting activities in the Italian healthcare sector, focusing on regulations that require the provision of non-financial information. The fourth section presents the methodological approach adopted in the study and the fifth section explains the findings of the research. The last section discusses the contribution of the paper and outlines directions for future researches.

Exploring possibilities of IR in Healthcare: opening the debate

CAVICCHI, Caterina
;
OPPI, Chiara;VAGNONI, Emidia
2017

Abstract

The nineties managerial reforms have introduced changes in the public organizations’ accounting information system, emphasizing the need for measures of efficiency, timeliness, quality, outcome, etc. (Hood, 1995; Marcon and Panozzo, 1998). These changes have been explained by their proponents in terms of improving organizational accountability and improving decision making (Coy et al., 1997; Lawrence et al., 1997). Accountability has resulted to be a key principle in the public sector, which has affected the way reporting is organized and designed. As argued by Steccolini (2004), accountability is a multifaceted and complex concept that evolves as social and cultural values change. The citizens’ increasing awareness of the sustainable development principles, for example, has determined a progressive pressure on social and environmental disclosure, bringing private and public organizations to change their reporting practices. Thus, some public organizations have started to disclose sustainability reports, social report, gender report, etc., determining a voluntary change in their practice. Some organizations have also changed the information disclosed through their annual report, as remarked by Neu et al., (1998). Churet and Eccles (2014) found that healthcare is one of the sectors with the higher proportion of organizations integrating the annual report with non-financial information. However, studies about the combination of financial and extra-financial information in the annual report of public sector’ organizations remains a quite under-investigated field. In this sense, studies on Integrated Reporting (IR) practices within public organizations are few (Dumay et al., 2016) but highly recommended (see for e.g. Adams, 2015). This pattern can be recognized also with reference to the Italian setting, where regulations are increasingly requiring companies to integrate financial and non-financial information, while in healthcare there is no evidence of IR approach. Whether IR would be implemented in the Italian public healthcare sector, additional concerns may be related to the role of the annual report in disclosing organizational performance and providing useful information for decision making. In fact, a national regulation (D.Lgs. 118/2011) has defined the structures and contents of the annual report to be delivered by the healthcare organizations (HCOs) to disclose and communicate their results. In particular, the regulation assigns a specific objective to the annual financial report: “to disclose information related to future actions, to actions in progress, to the ongoing situation, to those actors interested in political, social and financial decision making processes” (Article 9). However, Italian public organizations have been found to create those reports mainly to comply with legal requirements, thus providing poor quality reports mainly received by internal users (Steccolini, 2004). This challenges the role that annual reports have as accountability mean (Steccolini, 2004), and how they can be potentially used as integrated reporting practices combining financial with extra-financial information. Therefore, questions may be raised concerning the actors who are actually interested in this disclosure and for which purposes. Based on the above premise, the paper aims at exploring how management report is framed in the public healthcare sector, and whether an IR practice, as currently raised by the accounting discipline (Cima, 2016) would contribute or not to improve decision making and the public accountability. More in depth, through an exploratory case study undertaken in a public university hospital, the research enters the debate about the adoption of an IR approach in healthcare and deepens both internal and external actors’ perspectives about the need to integrate healthcare organizations’ disclosure with non-financial information. Thus, the research depicts the scenario of the information disclosed by healthcare organizations in the annual report, and deepens whether the integration of additional non-financial dimensions would contribute to report the value creation by healthcare organizations. The paper contributes to literature addressing the call for a deeper investigation of space for IR approaches in the public sector, narrowing the focus on healthcare (Adams, 2015; Dumay et al., 2016). In particular, the research consists in a first attempt to explore the possibilities for the implementation of IR in the Italian healthcare sector. This paper adopts a double perspective, that includes both investors and internal actors’ point of view shedding light on the different perceptions those actors have on the management’ reports combining financial and extra-financial information as a form of prior IR, and the eventuality to introduce within the investigated university’ hospital an IR ex-novo to disclose organizations’ value creation. To this line, the paper aims at addressing the call of Atkins and Maroun (2015) to address broader groups of stakeholders, other than capital providers to analyse integrated reporting practices adopted by organizations. The paper is structured as follow: the next section provides a general overview of IR practices and explores the literature in the field. The third section deepens the state of the art of reporting activities in the Italian healthcare sector, focusing on regulations that require the provision of non-financial information. The fourth section presents the methodological approach adopted in the study and the fifth section explains the findings of the research. The last section discusses the contribution of the paper and outlines directions for future researches.
2017
Integrated Reporting; sustainability; healthcare; financial reporting
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11392/2374172
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