*Financial Aspects of Health

care Managment

* Purpose of Healthcare
Management

*to provide the community with

the services it needs, at a
clinically acceptable level of
quality, at a publicly responsive
level of amenity, at the least
possible cost

* Purpose of Healthcare
Management

*By planning, organizing, staffing,

directing, and controlling

-(while communicating, coordinating, and making

decisions)

*By obtaining organizational

accreditation

-(Joint Commission)

* Purpose of Healthcare
Management

*By obtaining basic educational

requirements

-(BHA from an Association of University Programs in

Health Administration (AUPHA)--approved baccalaureate
program)
-(MHA/MBA from a Commission on Accreditation of
Healthcare Management Education (CAHME)--accredited
graduate program)

* Purpose of Healthcare

Financial Management

*To provide both accounting and

finance information that assists

healthcare managers in
accomplishing the purposes of the
organization
*By delegating authority for financial
matters from the governing body and
CEO to the CFO.

* Accounting and Healthcare

Financial Management

*Financial accounting
--provides accounting information, generally
historical in nature, to external users.
--1996 American Institute of Certified Public
Accountants (AICPA) Audit Guide establishes the
following four financial reports for external users:
balance sheet, statement of operations, statement
of changes in net assets, and statement of cash
flows.

* Accounting and Healthcare

Financial Management

*Financial accounting

* --AICPA has not published a new Audit Guide since

1996--An expected 2007 new edition should include

* Criteria to recognize charity care at cost.
* Disclosures regarding settlements to third parties.
* Accounting for physician loan/guarantees.
* Contributions and pledges.
* Auditor association with cost reports.

* Accounting and Healthcare

Financial Management

*Managerial accounting--provides

accounting information, generally

current or prospective in nature, to
internal users.

* Objectives of Healthcare
Financial Management

*To generate a reasonable net income

(difference between collected
revenues and expenses) by investing
in assets and putting the assets to
work.
*To respond to the myriad regulations
in a timely and cost-effective
manner.

* Objectives of Healthcare
Financial Management

*To facilitate the organizations

relationship with third-party payers,

who account for about 81 percent of
a healthcare organizations revenues.
*To influence the method and amount
of payment third-party payers
choose.

* Objectives of Healthcare
Financial Management

*To monitor physicians and their potential

financial liability to the organization in
terms of their ordering patterns and
possible negligence.
--Utilization review
--Credentialing and risk management

*To protect the organizations tax status.

* Quality Assessment and

Healthcare Financial
Management

*Direct measures of quality

*Goal-based measures
*Responsive measures
*Decision-making measures
*Connoisseurship measures

* Quality Assessment and

Healthcare Financial
Management

*Indirect measures of quality

*Resource measures
*Outcome measures
*Reputational measures
*Value-added measures

* Quality Assessment and

Healthcare Financial
Management

Goals

Outcomes
& Indicators

Key
Processes

Assessment

Improvement

Financial Management

14

* Quality Assessment and

Healthcare Financial
Management

*Joint Commission

*Sentinel indicators measure a process so

important that every time they occur,

the manager initiates an individual case
review.
*Rate-based indicators measure a process
and allow for an error rate

* Joint Commission Patient Safety

Standards

* Organizational Ethics and

Healthcare Financial
Management

*Utilitarianism--greatest good for the

greatest number
*Deontology--decisions are governed
by duties to one another that take
precedence over ends-based thinking
of utilitarians.

* Organizational Ethics and

Healthcare Financial
Management

*Conflicts of interest--owing duties to

two or more parties and fulfilling a
duty to one somehow harms the
other.

* Value of Healthcare Financial

Management

* Supports the management functions and

connective processes.
* Predicts which organizations will survive the
competition of the 1990s.

*Falling prices
*Restrictions on credit
*Reduced production
*Bankruptcies,

Thank You