Accounting for Healthcare Finance: Measuring Resources, Operations, and Financing.
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Healthcare Finance
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-is the practice of finance within health services organizations -includes both the accounting and financial management functions
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Concerns the measurement in financial terms, of events that reflect the resources, operations, and financing of an organization
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Accounting
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Provides the theory, concepts, and tools necessary to help managers make better financial decisions
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Financial Management
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What is the primary role of finance within health services?
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to plan for, acquire, and utilize resources to maximize the efficient and value of the organization
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Finance activities include:
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planning and budgeting managing financial operations financing decisions capital investment decisions financial reporting financial and operational analysis contract management and financial risk management which are primarily financial staff functions
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What are the four C's?
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Cost-continuously monitored Cash-businesses must have sufficient cash on hand to meet payment obligations as they occur Capital-must raise the capital(money) necessary to buy facilities and equipment needed to provide services Control-businesses must control their resources to ensure that they are used wisely
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What is the structure of the finance department?
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comptroller-manager who handles accounting, budgeting, and reporting activities treasurer-manager who handles capital acquisition, investment management, and risk management business manager-responsible for the finance function in a small HCO
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A single business entity that owns a group of similar providers, such as hospitals
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Horizontal System
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A single business entity that owns a group of related, but not identical, providers, such as hospitals, medical practices, and nursing homes
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Vertical System
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A hospital that treats all conditions that require a relatively short hospitalization <30 days
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General Acute Hospital
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A hospital that treats patients with a common characteristic or conditions, such as a children's or cancer hospital
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Specialty Hospital
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The concept that once a patient enters the system at one point, all services needed by that patient will be provided within the system
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Patient Capture
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What is a business?
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-an entity that: raises money in the capital markets, invests these funds in assets, uses these assets to create products or services, sells these products or services to sustain itself
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What are the four major categories of business organizations?
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proprietorship (sole) partnership corporation hybrid forms
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Proprietorship
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-a simple form of business owned by one person
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Partnership
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-an unincorporated business that is created and owned by two or more people
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For profit organizations
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-a legal business entity that is seperate and distinct from its owners and managers
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The earnings of a business after all expenses have been paid
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residual earnings
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Non for Profit Corporation
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-need profits to sustain operations as opposed to pure charities -tax exempt -charitable purpose
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The profit that is generated when securities are sold for more than their purchase price
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Capital Gains
