Statement of Operations and Financial Operations
Crystal A. Dilliard
Grantham University
AH531 Healthcare Financial Management
Professor Keith LaPrade
April 7, 2015
Statement of Operations and Financial Operations
1. List several efforts that have been enacted by payors to control costs. Several efforts have been enacted by payors to control costs. Many agree healthcare reform and controlling health care costs began as early as the 1960s, when federal funded Medicare, and federal and state funded Medicaid programs, reimbursed institutions for healthcare. Medicare eligible Americans 65 years of age and older, and Medicaid eligible Americans in the low income brackets receive health care coverage under these plans, requiring
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It is this author’s belief that no entities should stand in the way of an individual’s right to seek counsel, regardless of outcome. The ramifications of not suing a HMO could demonstrate no evidence to support efforts to amend the current law, and without legal documents demonstrating the consequences related to denial of care, the rights of patients, to ensure a safe and effective health care, according to standards of practice, may be compromised.
3. What are each of the financial statements commonly called in for-profit health care organizations and in not for-profit care organizations? Financial statements in for-profit health care organizations and in not for-profit care organizations are commonly called statements of, balance sheet reports, operations, changes in net assets, and cash flows (Zelman, McCue, Glick, & Thomas, p. 28-68, 2014).
Statement of operations of not for-profit health care organizations:
1. What is the analogous for-profit statement called? What are the main sections of the statement of operations? The analogous for-profit statement is a traditional income statement, but in a health care organization, it is called the statement of operations. The statement of operations does not show cash flow, yet it reports revenue and expenses of a specific time period. The main sections of the statement of operations include a heading, the body of the report, and
Maruthappu, M., Ologunde, R., Gunarajasingam, A.. (2012). Is health care a right? Health reforms in the USA and their impact upon the concept of care. Annals of Medicine & Surgery. DOI: http://dx.doi.org/10.1016/S2049-0801(13)70021-
This research paper is being submitted on December 8, 2011, for Mara Pehkonen’s M230 Medical Law and Ethics Course.
Obtaining reimbursement for services provided is a necessity for the survival of many health care organizations. This paper will explain, in my opinion, why the Centers for Medicare and Medicaid Services (CMS) are involved in this development and how it affects the American public. I will offer a suggestion to ensure meeting policy and procedure. I will finish by discussing three ideas listed on the CMS website.
The role of finance in Health Care Systems, Inc. as a regional not-for-profit hospital relates to both the accounting and financial management aspects of the business. Facets of both accounting and financial management are intertwined with maximizing productivity by way of managing and analyzing financial operations to ensure resources are being utilized properly (Gapensiki, 2013). The divulgence of financial reports to managers and investors will aid in the development of plans and budgets for future growth, assess acceptable levels of financial risk, manage contracts appropriately and make decisions related to capital investments allowing the organization to expand service offerings thereby demonstrating greater value in the community. Operating as a not-for-profit entity requires that the hospital operate exclusively in the interest of the public for a charitable purpose. Through understanding who the primary third party payers
With respect to Columbia Memorial Hospital, a profit and loss statement must be done in order for the clinic to know if they should continue expanding or shut down. A pro forma profit and loss statement advances the company's proposal for future revenues and expenses. Various companies have numerous approaches they use to reach how they will deliver the goods financially for the future. Separate scenarios have been investigated.
The debate over non-profit versus for-profit healthcare organization has been ongoing, does one provide better care than the other? Do the operations of for profit perform better than the non-profit organizations? Are the criticisms about for-profit organization validated and is there proof? The goal is to examine those questions as well as offer options to improve the financial and operational performance of non-profit and for-profit organizations criticisms.
The case of Ledina Lushko, a patient enrolled in a Blue Cross and Blue Shield of Illinois individual plan, highlights many of the issues that have plagued the United States healthcare system for some time. As an insurance plan provider, BCBS of Illinois takes pride in the health outcomes of our members and has a responsibility to contribute positively to their care. The fractured, ineffective care Mrs. Lushko received is disappointing, however, this case provides strong support for a shift in focus towards managed care and specifically, the Accountable Care Organization structure. The following details several aspects of Mrs. Lushko’s experience and how her care could have been improved by enrollment in BCBS of
For profit providers look at health care as a business, with a financial bottom line producing profits that can be distributed to shareholders. Supporters of for-profit health care say that increased competition can produce a more efficient, effective, less expensive health care system. Since the 1980s, for-profit health care facilities have proliferated, including national hospital chains, health plans,
Reports revenues and expenses for a specific period of time. A firm's revenues, gains, expenses and losses are listed on the income statement. Revenue is money earned from a company’s
Block, W. (2008). Is there a human right to medical insurance?. Business & Professional Ethics Journal, 27(1/4), 1-33. Retrieved from http://secure.pdcnet.org.ezproxy.liberty.edu:2048/pdc/bvdb.nsf/toc?openform&journal=pdc_bpej&yearrange=1999 –2009&category=0027_40182_2008
The major objectives of healthcare financial management include: generating income (which is the most important) because it is the financial status of the organization. It is important to ensure that revenues are exceeding expenses. After assets are invested in, they are meant to be used. They must respond to regulations and be accredited to qualify for loans, reimbursements, etc. Facilitate relationships with third-party payers because they are the ones helping with the bills. The health organizations must also influence method and amount of payment to avoid overpaying, when faced with capitated prices or prospective payments. Monitoring physicians is important because they are at the forefront of everything, so management must make sure that physicians’ orders are consistent with patient needs. Lastly, protecting tax status involves for-profit organizations trying to reduce tax liabilities, while not-for-profit organizations try to protect their tax-exempt
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.
“Hospitals can be non-profit, for-profit, and government-owned and/or operated” (Baker & Baker, 2006). There are different terms for each classification in how to report and handle the finances but the basics are the same for any type of business. Business finances require the following basic fundamentals: creating “budgets, understanding capital expenditure, loan acquisition, and financial fees” (Baker & Baker, 2006). Government owned and operated hospitals offer unprofitable services; which
1994 Summery of operations: Sales of products and services Materials, engineering, and production costs Selling, general & administrative expenses Operating costs Operating margin Other income Interest
Financial statements have several key components and specific criteria into them to relay the detailed information for auditors and management. A deeper look into financial statements and the many concepts surrounding them are needed to explain in more detail. It’s also important to recognize the Auditor’s opinion letter, balance sheet, operating statement, statement of changes in net assets, and statement of cash flows and footnotes of their involvement in the process. Relevant accounting articles are a useful supplement to financial statements and how they enhance concepts in the financial statement. The meaningful uses of financial statements for health care organizations are the epitome of current and future success of financial health.