Financial Analysis Of Healthcare Organizations

In 1997 University of California, San Francisco (UCSF) merged its two public hospitals with Stanford’s two private hospitals. The two separate entities merged together to create a not-for-profit organization titled UCSF Stanford Health Care. The merger between the health systems at UCSF and Stanford seemed like a good idea due to the similar missions, proximity of institutions, increased financial pressure with cutbacks in Medicare reimbursements followed by a dramatic increase in managed care organizations. The first year UCSF Stanford Health Care produced a profit of $22 million, however three years later the health system had lost a total of $176 million (“UCSF-Stanford Merger,” n.d.). The first part of this paper will address reasons

When I joined Exceptional Healthcare, we were operating at a loss. Operations were being financed with loans. The Board member briefed me on the situation and requested I identify the problem. First, I reviewed all the company expenses, and there was no expense to reduce, so I had to analyze the company’s revenue. I started by categorizing all patient visits by the payer (insurance companies) and by CPT codes (Type of visit/ procedure performed) to determine the reimbursement rates. Using my healthcare finance experience, I compared our reimbursement rates with other clinics in similar market/ business and noticed that ours were $500 to $800 lower. Then I audited the patient charts from the clinic to the billing company and discovered several

Palomar Health is one of the largest health care districts located in California around San Diego Counties. Palomar Health operates three hospitals, in addition to home health care, surgery, skilled nursing, ambulatory care, behavioral health services, wound care, and community health education programs. This paper will analyze Palomar Health’s financial statement from fiscal years following 2012 to 2015. An in dept analysis of the Consolidated Statement of revenue, expenses, and changes in net position will be examined to better understand the organizations standings of their financial outcomes for those following years (McIntosh L. 2015).

How do you see the various aspects of financial management as a whole for a healthcare organization? For example, how does one’s perspective influence decision making or how does the financial management relate to the organizational mission?

As I researched and analyzed the case of California’s Sutter Health System, I find the common accounting flaws many healthcare organizations have made and continue to make within the healthcare industry. In this paper, I will transfer the knowledge I gained throughout this class and incorporate that knowledge to deliberate an educated opinion on Sutter’s Health history, financial accounting complexities they faced, the remedy to their solution and the results they achieved by overhauling their collections system. Based on my research I will include my informed opinion of the approach used by Sutter Health; in my conclusion, I will validate the accounting techniques and state alternative approaches that could have been taken by Sutter

In this paper, I will use financial data and research of a publicly traded healthcare company to give an analysis of the selected company’s financial status.

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.

About the company I have chosen. Ascension Health has ascended to the pinnacle of not-for-profit health care. As it is one of the largest Catholic hospital system in the continental United States, and this making it one of the top providers of charitable health care in the United States, the organization's health care system is composed of nearly eighty hospital locations alongside over 12 rehab centers, special care facilities, and psychiatric hospitals. Ascension Health also operates assisted living for the elderly, many community clinics for the low income communities, and they also employee many other health care providers that assists in their goals of charity. All of the charitable faculties extend over 21 states all across the United

In recent years many healthcare organization has been facing financial difficulty forcing many to go into bankruptcy and eventually shutting down. The U.S. Department of Health and Human Services (HHS) reported that “there were over 504 hospital closures during the 1990s. Approximately 10% of all urban hospitals and nearly 8% of rural hospitals closed within the same period” (HHS, 2003). Hence, going through financial stress is not peculiar to ABC Hospital. Having studied hospital financial record and profitability for many years Langabeer noted that an average healthcare organization like ABC Hospital is susceptible to bankruptcy because they have “significantly poor liquidity, a high degree of debt leverage, and significantly low fund balances

Though they are not entirely comprehensive tools, a great deal can be learned about a hospital or other healthcare organization for-profit or not-for-profit from an examination of their annual financial documents (Finkler & Ward, 2006). The balance sheet and statement of revenue and expense can both yield valuable clues even in the absence of other evidence about changes that might be occurring in the organization, a definition of the type and degree of certain problems that it might be facing, and potential opportunities for improvement in performance that might exist (Finkler & Ward, 2006). Comparing two or more years' worth of financial information yields even more valuable insights, tracking movement in the hospital or other organization's ability to finance its activities and thus continue providing services at the same level, quantity, and scope as current operation.

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.

The Patient Protection and Affordable Care Act have given the clue to the healthcare industry which is related to the regulatory and reimbursement direction, dispute of the politic continuously to modify healthcare reform will be perform the uncertainty than usual into the healthcare landscape for the next becoming two years later. Moreover, this is certainly sure that the healthcare industries are penetrating the condition where the operating and capital costs act as the critical success factors. According to Horrssen (2013), over the next five years, capital financing decisions will play the center role in strategies. This is because, analysis and decision making will take the part as to determine the “winners”

The market sector we have chosen to do our financial analysis is Health Care. The Health Care market sector is then further divided into six main sub-sectors, for which our three companies, Johnson & Johnson (JNJ), Pfizer (PFE), and AstraZeneca (AZN), are categorized in the Pharmaceutical sub-sector. Furthermore, Yahoo Finance’s industry center labels these three companies as being Drug Manufacturers-Major. This industry is unique in that it has both defensive and cyclical aspects due to the overall need for medical treatment of diseases and the growth of innovative products and treatments. This market sector is also known for its heavy regulation and sensitivity to the political climate. One such example of this is the Affordable Care Act, commonly known as “Obamacare”. Other important characteristics of this market sector are its heavy Research and Development spending, extended times for products to reach the market and

Financial Management is one important part of health care financial planning. Many financial decisions are made on a day to day basis from all the accounting records and all the business transactions which occur. Some are the decisions made according to the organizations fiscal objectives although some are made on generally accepted accounting principles). So the question I would ask is this “How good is the financial management of our health care organizations and do they hold a good financial reporting records”?

With a company mission “to heal, comfort, and promote health in the communities we serve, Palomar Health is one of the largest health care districts in the area ("About Palomar Health | Palomar Health | San Diego County, CA," n.d.). Operating as a Medical Center (PMC), Hospital and many other facilities, Palomar is finding out that meeting capital needs and a weak local economy have proven a challenge for this organization. The following quantitative analysis on the financial performance for the years ending in June 30, 2015 and 2014.