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HEALTHCARE FINANCIAL MANAGEMENT (Inverstor - owned vs. Non-for-profit…
HEALTHCARE FINANCIAL MANAGEMENT
The role of financial management in today’s health services organizations
:
.
:check: Accurate finances planning
:check: Manage the capital distribution
:check: Maintain better efficiency
:<3: That helps for the health care providers to avoid mistakes and ensure fluent work efficiency and better service quality.
ISSUES IN HEALTHCARE MANAGEMENT
:red_cross: Government requirements and mandates
:red_cross: Data improvement and cost reduction
:red_cross: Finance distribution
BUSINESS ORGANIZATION
:silhouette: Proprietorship
:silhouettes: Partnership
:silhouettes: Limited Partnership
:silhouettes: Limited Liability Partnership (LLP)
:silhouettes: Limited Liability Company (LLC)
:recycle: Corporation
:recycle: Limited Liability Company (LLC)
:recycle: Professional Corporation (PC)
:explode: Hybrid forms
Inverstor - owned vs. Non-for-profit organizations
:!: Investor – owned corporation pays taxes; non-profit corporations are tax-exempt
:!: Non-profit organizations have a large number of stakeholders, but no shareholders; profit corporations – opposite
:!: Investor-owned corporation main motive is profit, not – for – profit corporation main motive is providing services, for well-being of the society
:!: From the form of organization, profit organization relies on Sole proprietorship, Partnership firm or company; non – profit most of the time is Club, Trust, Public hospitals, society, etc
:!: From the management side, profit corporation is led by Sole proprietor, partners or directors, as the case may be; nonprofit corporation by Trustees, committees or governing bodies
:!: Profit’s corporation source of revenue are sales of goods and services; nonprofit corporation’s - donations, subscriptions, membership fees etc. (Surbhi, 2016).
GOALS
:
INVESTOR-OWNED FIRMS
:star: Wealth maximization
:star: Personal and employee’s welfare
NOT-FOR-PROFIT FIRMS
:smiley: Stated in terms of mission – mainly providing services, for well-being of the society
HOLDING COMPANY FORM ORGANIZAION
:red_cross: DISADVANTAGES
:red_cross: Ease of forced divestiture.
:red_cross: Partial multiple taxation;
:check: ADVANTAGES
:check: Isolation of risks;
:check: Separation of for-profit and not-for-profit subsidiaries.
:check: Control with fractional ownership;
ORGANIZATIONS
VERTICAL
HORIZONTAL
INTEGRATED DELIVERY SYSTEMS
Challenges
:warning: Expanding upon health system choices available to consumers
:warning: Providing strong operational management of the IDS by highly skilled personnel
:warning: Identifying and aligning the key economic initiatives and incentives of the participating provider organizations;
:warning: Analyzing financial integrity
:warning: To achieve higher level of administrative and clinical integration
:warning: Identifying risks and handling claims
:warning: Developing and implementing quality of care and patient satisfaction measurements (Boone, 2000).
:fire: AGENCY PROBLEM :fire:
:beer_mugs: Factors to REDUCE it
:smiley: The threat of firing
:smiley:The threat of takeover.
:smiley: Creation of managerial incentives (like incentive compensation plans, stock options, performance shares, concept of economic value added (EVA) etc.)
:explode: TAX SYSTEMS
:silhouettes: Corporate income taxes
:silhouette: Individual (personal) taxes
:explode: MACRS TAXATION SYSTEM. Components
:checkered_flag: A recovery period that defines the length of time over which the asset is depreciated;
:checkered_flag: The depreciable basis of the asset
:checkered_flag: A set of allowance percentages for each recovery period (Gapenski, 2011).
