The Healthcare Financial Executives Encounter Challenges For The Health Care Industry

You have been asked by a health care magazine to write a series of articles focusing on health care financial concepts. The articles will be included in five consecutive issues and will be geared towards readers with little knowledge of finance. You must ensure that the articles are both informative and engaging to your audience. You must also ensure that your articles relate financial principles to the health care industry.

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

The healthcare system in America started as a predominantly volunteer system where patients were required to pay little to nothing for treatment. Since it began, the healthcare industry has seen tremendous changes that have transformed it into a business entity which has operations like financial management, strategic planning and functional specialties to keep the industry viable. The industry is one of the largest in the country employing 15 million people with a projected increase of jobs with 3 million jobs annually. As the healthcare industry continues growing, services and personnel are changing, and various dynamics are coming into play to accommodate changes (Smith, Saunders, Stuckhardt, & McGinnis, 2013).

Healthcare costs in the United States have been rising for several years and show no sign of stopping. In 2008, the United States spent on 2.3 trillion on healthcare, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 19801. Although the large amount of money invested in healthcare does translate to better care for Americans, the worsening economic situation, rising costs, and federal government’s deficit have placed a great strain on the system. This includes private employer-sponsored health insurance coverage and public insurance programs such as Medicare and Medicaid. According to the Henry J. Kaiser Family Foundation, a private and non-profit healthcare analysis organization, “in 2008, U.S. health care spending was about $7,681 per resident and accounted for 16.2% of the nation’s Gross Domestic Product (GDP); this is among the highest of all industrialized countries”1. Concerns for the enormous strain on the financial systems that fund healthcare and the desperate need to provide adequate healthcare for Americans have driven many a President since Theodore Roosevelt in 1912, to seek some type of healthcare reform and universal healthcare for all Americans. President Barack Obama succeeded where many had failed and on March 23, 2010, a national health reform law, the Patient Protection and Affordable Care Act was signed into law. On March 31, 2011, the Department of Health and Human Services (HHS) issued new rules

The rising cost of health care has led companies to stop offering health insurance for employees, and private insurance is often too expensive for people to afford. Many families make too much money to qualify for Medicaid, but are unable to pay for private health insurance. Health care costs in the United States have more than doubled in the last twenty years. Insurance premiums are rising five times faster than wages, and Americans are spending more money on health care than people in any other country. The average amount one person pays per year for health care in the United States is 134 times higher than the average of other industrialized countries (“Health Care Issues”). Even people who have insurance aren’t guaranteed coverage. Many insurance companies find loopholes to avoid paying for expensive medical treatment, leaving people with massive debt from medical bills. Medical bills and illness cause over half of all personal bankruptcies in the United

While the United States has some of the best doctors and healthcare facilities in the world we fail at being efficient and effective. Currently there are too many unplanned readmissions, medication errors and hospital acquired infections. The United States health system does not effectively provide preventive medicine for individuals with chronic diseases, and this portion of health care consumers account for the majority of health care costs (Kocher et al., 2010).

Effective financial management is the basis of thriving health care organizations. Organizations must make good investment decisions based on objective analysis (Healthcare Financial Management Association [HFMA], 2005). Integration of financial management principles provides decision makers with guidance to make capital decisions maximize mission-based benefits at effective costs (HFMA, 2005). An operating budget is the statement of profit and loss for the entire organization. Various health care entities prepare operating budget for the following year for discussion and approval by top management (Academic Writing Tips, 2011). At the end of the year, departmental managers provide an account for the previous year’s

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

As a result of enacting the Affordable Care Act, insurance costs will increase because the government will offer universal healthcare. This requires an exorbitant amount of “new [medical] technology [which] will increase efficiency; the cost of new tests and treatments will outweigh the savings”, consuming millions of dollars (Whelan). Therefore the price of healthcare will increase in order to cover all these expenses needed to contribute to the nation’s overall health. Without the Affordable Care Act in effect, the current annual average expense of healthcare insurance is estimated to be around $5,600 per person, an increase compared to $4,255 in 2010 (Kaiser Family Foundation). After the recession that began in 2007, “the government expects that the growth of healthcare spending will outpace the expansion of the economy. By 2020, 1 of every 5 dollars spent in the U.S. is expected to go to healthcare” (Levey). This thus proves that as time passes the amount of healthcare is going to increase, but precise expenses cannot be predicted since it will be evident in the following years to come.

This course is designed as an introduction to the terminology, processes, functions, and financial reports commonly encountered in health care operations. This course introduces the concepts of basic managerial financial functions, such as budgeting, reimbursement methods, and the responsibilities of health care financial

Health care spending has grown rapidly over the past four decades, more than any other sector of the economy. Increases in the cost of health care in the United States is evidenced by per capita expenditures and by measuring health care expenditures in relationship to the Gross Domestic Product (Conklin, 2002). The rapid growth in expenditures is caused by a variety of factors. Initially, growth in the United States

In the health care world finances play a significant role in the quality of care rendered to the consumer. There is no health care facility that is the same when it comes to their financial management because it is needed both internally and externally to ensure that it runs properly. Today’s health care field consist of either not-for-profit organizations, for-profit organizations and governmental, (Gapenski, 2008).

This paper utilizes five established sources to examine and analyze the effects unstable and constantly changing healthcare costs have on the American economy. These sources all express different components of healthcare spending that play a major role in the economy. By utilizing Federal Health insurance programs such as Medicare and Medicaid, these sources provide an inside look on ways in which these programs affect the economy. Cheeseman (2008) expands on how healthcare costs affect businesses and Johnson of The Associated Press describes how it affects the economy as a whole applying numerous factors such as components that make up the healthcare spending, how they hinder the progression of other aspects of economy by limiting government spending to healthcare, and their immediate effect on workers and businesses. Though healthcare is beneficial to some, Light (2016) reveals the darker effects it carries on the economy. Cohn (2014) provides a catalog of problems economists face when the facts concerning health care costs are concerned and outlines a series of statistics that display yearly growth rates in healthcare costs, and actual and projected growth in healthcare spending. Auerbach and Kellerman (2011) present findings on how increasing healthcare costs impacts the American family when available income and buying power is concerned while providing data and statistics to complement discoveries and build a solid case on how the bad outweighs the good. This

In 2010, the United States health care spending grew 3.9 percent. The total health care expenditures reached $2.6 trillion, which translates to $8,402 per person or 17.9 percent of the nation’s Gross Domestic Product (GDP). Health care spending plays a major role in shaping our country's health care system. Financing health care influences how people access health care, the types of health care provided, and how the cost of health care is distributed among members of society by income and by health status. The United States has been in a recession for much of the past decade, resulting in higher unemployment and lower incomes for many Americans. (Wikipedia)

For several decades health care has been tied to the economy and with the current downturn we see continued efforts to control and reduce over-head costs. Health care organizations in their effort to become more efficient and address changes in the industry have altered their strategic business plans. Lee & Alexander (1999) researched organizational change in hospitals and their survival, in this paper I hope to discuss their findings and add other examples to validate their conclusions.