For the previous activity (attached), you selected a health services organization (HSO) and then developed five research questions to gain a better understanding of the financial condit
For the previous activity (attached), you selected a health services organization (HSO) and then developed five research questions to gain a better understanding of the financial condition of your chosen HSO; its budget preparation process; and fiscal planning strategies related to the financial management of the organization. For this assignment, you will provide thorough responses to each question and report your key findings.
Instructions
Using the HSO you identified in the previous activity, use reputable sources to locate publicly available financial information that will provide you with the answers to the five questions you developed in the previous activity.
You will then write a three-page paper in which you include each of the following components:
- Develop an introduction to your chosen healthcare organization.
- The name of the selected organization and background information, such as its location, size, focus, services provided, demographics of patients served, for-profit or nonprofit status, et cetera.
- Indicate whether the organization has a separate finance or business department and, if so, who is responsible for the department.
- Any other information that may help explain the chosen organization. For example, is it unique in how its finances are managed? If so, how?
- Develop research-based answers to the five previously created questions.
- A response to each of the five questions you created in the previous activity. This should include specific information pertaining to the chosen healthcare organization's budget preparation process, fiscal planning strategies, and how the financial condition of the organization is routinely monitored and corrective actions are taken when necessary.
- Assess any differences and similarities between what you have learned from the textbook, videos, and other readings with what you have learned in your research.
- This is the section of the paper where you assess any differences between what you have learned in this course and what is reflected in your research. This is also an opportunity to identify connections between cost and quality and explore the interplay of performance improvement, regulatory compliance, provider relationships, and payors. Keep in mind that the background and context of the organization play a role in how these pieces fit together.
Resources
There are a few ways to access public information on health services organizations.
- Google Operator Search: You can use symbols or specific words in your Google search to make results more precise. For healthcare organizations' finances:
- If your chosen health services organization has a website of www.communityhospital.org, you would use the following search to look within their website for financials:
- site:communityhospital.org "financial statements"
- To narrow your search even further, you could add filetype: to the end of your search to look for specific files. For example, filetype: pdf.
- If your chosen health services organization has a website of www.communityhospital.org, you would use the following search to look within their website for financials:
- EMMA: EMMALinks to an external site. (Electronic Municipal Market Access) is a great resource for locating reports on large nonprofit hospitals. Simply use the "browse issuers" at the top, and then click on the state your hospital is located in. From there a populated list of bond issuers within the state appears. Many of them are just the city name, but it is easiest to put the word health in the "Search within this list:" box to narrow it down to bond issuers for hospitals. On the next page in the same search box, you can put the name of your hospital and you will select the most recent result. This will take you to a page with different tabs containing financial information.
- EDGAR Report: All companies are required to fill out periodic EDGAR reports through the U.S. Securities and Exchange Commission. This applies to public, for-profit organizations. You can learn more about the reports, how to read them, and how to access them at the SEC's Filings & FormsLinks to an external site..
- GuideStar: GuideStarLinks to an external site. offers a way to look for finances from nonprofit healthcare organizations.
5
Healthcare Finance Questions
Diamond Mizell
Health Financial Management HSA 525
Harold Griffin
07/13/2023
Organization Chosen: Mayo Clinic
Mayo Clinic is a not-for-profit organization that provides tertiary and long-term care services to patients with different problems. I chose this facility because it is the largest in the U.S., providing integrated tertiary medical services in over 50 clinics and hospitals. Being a not-for-profit organization means that many of Mayo’s funds come from donations. However, it also collects revenue from service delivery, which is used for projects and expansion. The research aims to understand the financial health of the Mayo Clinic, including its plans for future growth and development. The following questions will help in the study;
1. What period does your financial plan cover and is it documented?
A financial plan can be quarterly, semi-annual, or annual, depending on how a healthcare organization plans. The period for which a strategic financial plan is prepared will help understand how frequently Mayo Clinic conducts financial planning. Short-term plans will indicate frequent planning, while long-term plans will indicate less frequent efforts by the financial planner. It will help understand how the organization's financial plans change or adjust to meet specific needs such as emergencies.
2. Do you have realistic cash flow projections for the next three years?
For a budget and fiscal plan to be effective, financial success must be accurately predicted. The prediction must be realistic and align with the healthcare organization’s financial ability. Therefore, it is essential to understand whether Mayo has accurately predicted cash flow for the next three years. This will require enquiring if the organization has done market research to back up its financial estimates and predictions. The forecasts must be tested against Mayo’s financial plan to ensure all gaps are filled. This is essential in determining the organization’s financial health.
3. Are you liquidable? Are you bankable
Healthcare organizations handle emergencies and other situations such as change. This question aims to understand if Mayo Clinic can quickly access funds by borrowing, accessing from its operating cash flow, or liquidating assets, and being bankable means that an organization can give itself a loan. A healthcare organization must have valuable assets that can guarantee it cash in case of emergencies or a loan when there is a need (Whysel, 2009). It demonstrates capability and financial strength.
4. Are you receiving new clients and working with repeat patients?
Cash flow for a healthcare organization depends on its ability to maintain the loyalty of its clients and attract new ones. It also indicates that the healthcare organization delivers high-quality healthcare at low costs (Zietlow et al., 2018). High healthcare charges derive clients away. Having a steady stream of new and repeat patients indicates that a healthcare organization is stable financially and has numerous options for generating revenue. Therefore, it is essential to understand if Mayo Clinic has access to new customers and if it can maintain its profitability even when there are shifts in trends and buying patterns.
5. Are your investments sufficient? How have you mapped out the use of future funds?
In healthcare, significant investments drive an organization to a strong competitive position. Has Mayo invested in revenue-generating projects? Understanding this will require the financial officer to elaborate on their capital investment levels and how they align with financial ratios. It is also critical to consider how Mayo plans to spend its finances in the future. With the increasing healthcare costs, planning is essential, and targeting the right points will secure an organization’s financial stability and sustainability.
References
Whysel, B. (2009). Liquidity meets the new normal: for health systems today, ample liquidity means" never having to say you're sorry" to your creditors, your board, or your community. Across the country, executives are asking," When will things return to normal?" My answer:" Manage your liquidity as if this were the'new normal.'". Healthcare Financial Management, 63(12), 108-110.
Zietlow, J., Hankin, J. A., Seidner, A., & O'Brien, T. (2018). Financial management for nonprofit organizations: Policies and practices. John Wiley & Sons.
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