Financial Failure Prediction in the Healthcare Sector: An Application on the Sector Balance Sheets of the Central Bank of the Republic of Turkey

Abstract

This study aims to estimate the financial failure risks of healthcare institutions. In this context, using the sector balance sheets published by the Central Bank of the Republic of Turkey (CBRT), we use the financial failure of health and social services activities and sub-sectors in 2009-2022. In the study of annual data, the risk of financial failure is analyzed using the models Altman Z Score, Springate S Score and Zmijewski J Score. According to the results of the analysis, in the Altman Z Score and Springate S Score models, it can be said that the risk of financial failure in the healthcare industry is high for both sub-sectors in the years included in the 'analysis'. It can be noted that the healthcare industry is at risk of financial bankruptcy, both in the pre-pandemic period and during the pandemic period. On the other hand, the Zmijewski X Score model yields results predicting a lower risk of financial failure.