Healthcare Finance
In order to be successful in the present complex and frequently unfavorable business settings, a healthcare organization's strategic direction should be estimated, focused, and financially sustainable. Strategic business planning is an indispensable instrument to aid organizations focus strategic choices within the financial actualities of their environment. An efficient strategic business planning cycle includes making an evaluation, identification of business objectives, making strategies, performing an impact analysis and developing an execution plan. The important steps in strategic business planning comprises of conducting an assessment, identifying business objectives, making a strategy, carrying out an impact analysis, and developing an implementation plan. This procedure could include a one-to-three-year sequence and can be applied at the clinical service line or at the level of business unit level for a greater focused planning. The only certainty in the present healthcare environment is a constantly changing set of hypothesis regarding the future. (Bachrodt; Symth, 2004)
The assessment stage prepares the foundation for planning. Based on the specific market or concerns the intensity of analysis at the assessment changes. Nevertheless, at the least, three major spheres of analysis are required: future market scenarios, locating a financial outlook, and finding out strategic advantages and weaknesses. The crux of a strategic business planning is to secure, and if possible, enhance the financial condition of the organization, facilitating it to carry forward with its objectives into the future. What a hospital must ensure is that, it should develop a macro level financial model linked to its demand forecasts and based on "most likely" hypothesis of revenue and expense groups. Certain level of capital costs connected to infrastructure and essential instruments must be taken into in the base model. Including a standard component at this stage will assist in identifying scope for improvement and sensitivity analyses for assumption development. (Bachrodt; Symth, 2004)
Since business planning is concentrated on prioritizing future investments in the medical enterprise, it is important to transcend the income statement to the balance sheet, cash now statement, debt capacity, and availability of capital for the planning scenario. Through application of outside rating metrics, another stratum of credibility is added. Up to the level possible, the hospital must evaluate the financial performance of its clinical service lines, at the contribution margin level only. This evaluation will underline possible...
Health Care Finance Assets and Liabilities Assets and liabilities are found in a balance sheet. Baker and Baker (2011, p. 107) define a balance sheet as a record of "what an organization owns, what it owes, and basically, what it is worth." Item Asset Liability Cash Inventory Bonds payable Buildings Payroll taxes due Accounts payable Equipment Notes receivable Assets, in basic terms, are all those items that an entity owns. In essence, an asset should have some value attributable to it. Current assets, according
Healthcare Finance: What is the break-Even analysis approach and its application in health care organizations? Unfortunately, hospital and health care budgeting of resources has become increasingly important in this cost-conscious era of health care. The last decades of cost-controlled medicine have required fiscally conscious approaches to the healthcare for many organizations, often at the expense of patient services. A financial analyst must strive to minimize this, yet still keep the organization
Healthcare Finance The relationship between the doctor and a possible patient is established when the physician asks the person for the first time as how he could be of possible help. This direct and simple enquiry is the beginning of the trust of the patient that has to be put in the physician for any treatment to proceed. The patient is in need of help at that time, and has to
Healthcare Finance What are the dynamics of patient accounts receivable? What are some of the factors affecting patients accounts receivable? Facing the challenge of how to address the hospital's unpaid accounts receivable can be one of the most emotionally draining issues for a patient accounts receivable department. In addition to people simply reigining on their payments, the department must face patients who cannot pay, who did not understand that their insurance would
Healthcare Finance Government rules: In United States the Congress had passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 or MMA and with this imposed a stoppage for 18 months on the starting of new physician owned specialty hospitals. At the same time, they also wanted to know the position regarding certain matters of physician owned heart, orthopedic and surgical specialty hospitals through MedPAC. The team visited sites, made legal
Health Care Finance One of the things people should know is that the landscape for health care is not good at present, especially in the not-for-profit sector. We are definitely running a not-for-profit health care institution here at VGH. Consider the Moody's Outlook for 2012, which is currently negative. There are a number of challenges that institutions like ours face, and will be explained in this article. Hospital revenue growth for the
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