Discussion: Finances In Healthcare Management

Discussion: Finances In Healthcare Management

Discussion: Finances In Healthcare Management

Assessment #4: Ratio Analysis 

• Write a 4-6 page paper in which you discuss the value of ratio analysis in decision making for health care organizations. Complete the following in your paper:
• Discuss the meaning of ratio analysis in healthcare.
• Pick one (1) ratio from each major group from the financial statements.
  • Liquidity ratios (Current ratio, Days Cash-on-Hand, Quick Ratio)
  • Profitability ratios (ROE, ROA, Total Margin, Operating Margin)
  • Leverage/Capital Structure Ratios (Debt ratio, Equity ratio, Debt to Equity Ratio)
  • Nonfinancial Ratios (Occupancy rate, payer mix, ALOS, Expense per discharge, FTE per bed, HMO penetration)
  • Permalink: https://collepals.com/discussion-finan…hcare-management/ ‎

• Discuss the ratio and provide examples with calculations
• Evaluate the meaning of the calculations related to the financial health of the organization.
• Explain the factors that affect the results.

You can also utilize the Help4UHMO Organization financial statements or a real-life health care organization to evaluate by researching their financial statements. You can use the organization from Assessment #2.

Healthcare Financial Management

Have you ever wondered how hospitals pay for all their equipment? Or how your hospital bills are processed? Healthcare organizations operate like any business and rely on strong financial management.

The primary role of financial management in healthcare organizations is to manage money and risk in a way that helps to achieve the financial goals of the organization. When a healthcare organization has strong and organized financial management plans, they’re able to provide efficient healthcare to all their patients.

Financial Management Functions

The basic activities involved in financial management in healthcare organizations include evaluation and planning, long-term investment decisions, financing decisions, working capital management, contract management, and financial risk management. We’ll cover these in greater detail now.

1. Evaluation and Planning

Financial management involves evaluating the financial effectiveness and overall operations of the healthcare organization. This allows the healthcare organization to plan for the future. For example, let’s say that a hospital evaluates emergency room revenue and discovers that they’re losing patients to a neighboring hospital with more space. In response to this, they may decide to plan for an expansion of their emergency room.

2. Long-Term Investment Decisions

The financial team has a hierarchy, but in general, input is taken from all the managers at all levels when it comes to big investments in the business. Long-term investment decisions involve analyzing implementation strategies and determining how the investment might affect the financial future – for the better or for the worse. Taking the example we looked at before, the financial team at the hospital would look at the cost of an emergency room expansion and potential revenue increases and decide if it would be a good investment.

3. Financing

The financial team must also raise funds for expenditures. This might involve things like fundraising, grants, loans, or using internal funds. They’ll look at the cost and benefit of the investment and/or the kind of debt that they will incur. The senior manager will make the ultimate call on financing. In the case of the emergency room example, the financial management team will bring someone in to determine how much a renovation would cost as well as how long it would take. They may decide to use internal funds and then take out a small loan to cover the rest of the expenses, knowing that the long-term investment will bring them more revenue to ultimately help them pay back the loan.

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.