Introduction to Healthcare Finance

Question 1

How does finance work in the healthcare business, why is it important?

Answer 1

Finance is very important to assure business continuity through proper planning, controlling costs, and delivering the service.

Question 2

Viewpoints of healthcare organizations

Answer 2

• The financial view: these managers work with finance daily.
• The process view: these managers work with the system of the organization.
• The clinical view: these managers are usually responsible for service delivery.

Question 3

The Elements of Financial Management

Answer 3

1. Planning
2. Controlling
3. Organizing and directing
4. Decision making

Question 4

Types of healthcare organization

Answer 4

1.Profit Oriented: individual, partnership and corporation

2. Nonprofit Voluntary: church-associated, private school-associated, and foundation associated
3. Nonprofit Government: Federal, state, country, city, city-country, hospital district, and state university

Question 5

Types of Accounting

Answer 5

• Financial: for outside/third parties (government, healthcare planners, stockholders) which emphasize eternal reporting under generally accepted accounting principles to report occurred transactions.
• Managerial: for inside or internal use (strategy, planning, controlling, directing). It is not bounded by accepted accounting principles. It also covers the future in the form of projecting outcomes and preparing budgets.

Question 6

Finance Management Challenges

Answer 6

1. Financial concerns
2. Reimbursement and regulation
3. Indigent care costs and bad debt losses
4. Balancing financial and quality issues
5. Revenue cycle improvement
6. Access to capital (financing)