Accounting Fundamentals For Health Care

The HCS 405 week 1 financial terms worksheet throws light on some of the most basic concepts of the healthcare business. Understanding health care financial terms is a prerequisite for both academic and professional success. The health care business helps the nation by providing the building blocks that the citizens need to live a successful and healthy life. The worksheet is intended to ensure that the students understand some of the basic terms used in the business world of the health care industry. The purpose of HCS 405 individual and team assignments is to make the students aware about the numerous strategies employed in the financial and other departments of a

As discussed previously, the Affordable Care Act of 2010 passed by the legislature, drastically changed the entire healthcare economy. In fact, ever since the ACA was passed it was required by law for hospitals to increase the amount of attention given to the individuals of the community in order to meet their needs. Also, the ACA allowed close to 10 million individuals to have health insurance through Medicaid and private health insurances, which has a high impact on all the hospitals, such as Yale New Haven. For example, since millions of Americans can now afford health insurance, there is a large influx of patients who can go to hospitals and actually afford the overall cost. The non-profit hospital of Yale New Haven is benefiting in two ways. First, they are achieving their mission by caring for the individuals of their community who now have insurance and secondly, they are being compensated in terms of revenue to improve their organization in regards to hiring the greatest physicians and having the best technology and supplies to treat their large influx of patients (Cunningham, 2015). The rise in health insurances increases the total amount of money earned by that non-profit organization and the amount of patients receiving great quality of care.

In order for the country to stay updated on the latest medical equipment and procedures, there has to be some sort of income to allow this, and thanks to Medicare this is happening. Researchers believe that the creation of Medicare is directly related to the advancements in procedures such as open heart surgery and specialized units such as cardiac intensive care units (Lewis,2017). These procedures now are saving lives of many people, including those not involved in the Medicare system, which accounts for about 17% of our population. Because of the advances in the medical field because of this program, many citizens would agree that this program is beneficial to our

Managers who are managing health care organizations must be attentive to the accounting practices and must obey and practice the financial management procedures to be able to solve any issues if any should arise. With the continuation of the high costs of health care managers as well as consumers must know how to budget carefully. According to All Business. (2010), the cost of providing health care services, patients way of payment for these services and the environment in which those patients reside and receive those services are important elements that affect the care this is or may not be

The United States can boast of being the country with the best technology in the health industry, the best expertise and also the best infrastructures. However, these services are not readily available to all due to the relative cost and mostly lack of health insurance. In some situations, the health insurance may be available but coverage is limited and with tentacles of restrictive clauses. For years these have been the measure of our healthcare system and long overdue overhaul that became eminent via the Obama Care in 2010 also known as the affordable care act. The rapidly rising health care costs over the decades have prompted the application of business practices to medicine with goals of improving the efficiency, restraining

The Northeast Health Council, INC was established in 1993 to meet the primary healthcare needs of the residents of the Northeast through a not-for-profit community-responsible approach.

In conclusion, a health care organization’s primary focus may be to provide quality care services; however the financial wellbeing and viability is critical to meet that focus. “A substantial portion of U.S. Generally Accepted Accounting Principles (U.S. GAAP) applies specifically to reporting entities that are involved in the business of healthcare. Therefore, the generally accepted accounting principles were developed as a set of

The greatest financial challenges to a health care provider are its revenue cycle and receivable management. The revenue cycle is the process that includes all the administrative as well as the clinical functions that are essential and important for capturing, managing, and collecting the patient service revenue whereas the receivable management deals with the planning, organizing, directing, and controlling the receivables. Therefore when all these are taken into account with proper measures they can serve well in making the health care provider sustainable in financial decision. Well if we look at the health care organization we can concatenate many of these who are actually available for the discussion of their alternative to the

As healthcare organizations adapt to the changes due to Healthcare Reform, many organizations are faced challenges with decreasing revenues in relation to the transforming from volume to value-based purchasing that have deteriorated reimbursement payment rates and preventive care that keeps patients healthier while reducing inpatient revenues along with escalating cost to do business due to more compliance cost, and the encouraging of integration through the accountable care organization model. (Brown, Werling, Walker, Burgdorfer & Shields, March 2012). As a result of Healthcare Reform, many organizations have been driven by environmental forces and ongoing trends to consolidate with other healthcare systems to deter the effect of these changes due to the new healthcare laws through the desire of gaining more capital, opportunities for future investments, and to better compete in the healthcare market (Healthcare Financial Management Association, Dec 2016.).

The major difference between healthcare finance terminology and business finance terminology is that these terms focus on factors unique to the health services industry. For example, the provision of health services is dominated by not-for-profit or¬ganizations (such as ours), which are inherently different from investor-owned businesses. Also, the majority of payments made to health¬care providers for services are not made by patients—the consumers of the services—but rather by some third-party payer (e.g., a commercial insurance company or a government program). Even the purchase of health insurance is dominated by employers rather than by the individuals who receive the services. These terms emphasize ways in which the unique features of the health services industry affect financial decisions. The healthcare industry is a service industry. It is not in the business of manufacturing, say, widgets. Instead its essential business is the delivery of healthcare services. It may have inventories of medical supplies and drugs, but those inventories are necessary to service delivery, not to manufacturing functions. Because the business of healthcare is a service, this overview of key healthcare terminology will focus on the practice of financial management in the services industry.

Where do we go from here? What are the policies or laws that need to be made or regulated in order to function properly? Which are the problems that need to be addressed if we want to grow as a company? These are some of the questions that governs health care administrators daily. Understanding the market and predict it outcomes are some of the benefits of understanding economics. When we understand how is the market operating, we could be prepared for changes that occurs or even create them. Understanding economics open a window of opportunity and challenges to administrators.

The payment system in health care is evolving and if a health care organization does not change with it, it will fail. The health care organizations need to reduce their cost and reduce inpatient days because refund from the government can be affected. In addition, when costs and inpatients days are reduce, there needs to be other areas improved to gain more net worth. Therefore, quality needs to be improved so that there is more income entering the organization. Also, the leaders of the organization need to budget their finances so that they can reach all their goals and maintain their philosophy. According to Wolper (2013), “group practices have struggled to cope with declining reimbursement, increasing purchaser pressure, and a constantly shifting environment”. (p. 89) This is why I believe the payment system is one of the areas that will impact health care organizations now and in the future.

With these types of organizations they have different methods of payments and reimbursements. They have guidelines through the government that they will have to abide by. The government sponsored payers are Medicaid and Medicare. The majority of patients that are treated are on Medicare or Medicaid. With patients not insured each type of organization handles reimbursement differently. For- Profit hospitals it is bad debt, which is when charges of patient are written off. With not –for –profit organizations it is considered charity care. This type of care has to be documented and reported on tax status.

Within today’s health care finance plans financial management is one of the most important aspects. There are numerous financial decisions that are handled from day to day in reference to accounting records and the business transactions that occur within the organization. The organizations fiscal objectives tackle these decisions. A concern that may arise is the integrity of the health care organization’s financial management department and the accuracy of their records.

The face of medicine is changing. We see new advancement in medicine and technologies on the horizon every day. Congress and the President have actively been discussing health care coverage for all Americans. The way we practice medicine today is far different from that of even 20 years ago. The delivery of medicine has in the past evolved along a fee-for-service model. Today there is a significant change from fee-for-service to payment based on quality received. This has been dubbed value-based purchasing. As this new remodel emerges finances will no longer be dominated by a system of volumes and productivity but will change to a system of preventative medicine and payment for quality of care. Those practices and providers who are leading