Q2

Answer

The boards' duty to ensure that management (and finance) teams operate
effectively whilst achieving objectives that contribute to supplying people
with the best facilities and profitability. For healthcare institutions to thrive
and offer reliable healthcare for all their customers, they must provide
strong and effective financial statements and processes that enable
government agencies to track the variables.

Senior executives depend on finance experts to provide them with

accounting and other financial details to help make choices and analyze
internal and external expenditure (Li and Collier, 2000). Directors of health
care financing play a primary position in ensuring sure health care facilities
will provide adequate funding to meet all their costs to prepare for the
future.

Here are nine fundamental reasons to assess and report the financial
performance of healthcare financial management.

1- Financial review, forecast, and preparation.

The government and financial managers review the efficiency and financial
performance of a business. Successful preparation helps one to prepare for
the near-term and long-term (Gaynor and Anderson, 1995). For example,
let's imagine that a healthcare facility lost patients to an alternate medical
centre situated on the other side of town because the centre they had used
was sluggish and obsolete. Careful preparation and specific assessment
should be used to upgrade the clinic's technology.

2- Generating profits.

Another purpose of financial accounting is to accumulate assets to avoid

bankruptcy. To boost their financial condition, administrators must
continuously track the costs of health care facilities. They consider the
efficacy of the different departments that form a hospital. In addition to
generating revenue, think about how to introduce new services. For
example, now that cannabis is legal in some jurisdictions, some healthcare
institutions might propose adding a cannabis pharmacy as a potential
stream of revenue, which means the substance is secure and being
dispensed lawfully.

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When senior management consent on a project, the health care financing
planner plans a budget and shows the expenses, means of support and
estimated income from the project.

3- Following tax laws

Federal and state legislatures are continually searching for innovative

opportunities to appropriate more government money, and one way they
achieve so is by defunding a charitable agency. As a consequence, it is
essential for health care administrators to comply with tax-exemption laws
and regulations.

To become a non-profit agency, hospital providers offer low-cost services to

needy people. Any organizations have performed need analyses and have
adopted plans to meet their community's needs. Another approach is
establishing nursing schools in underserved areas and offering affordable
education to enable more nurses to practise there.

4- Controlling recurring costs.

Healthcare finance administrators check out expenses to verify the sufficient

funds are being utilized (Drummond and Davies, 1991). Physicians influence
most of the budget. They will recommend drugs or supplies that a patient
does not require and may create complications for the organization.

Finance administrators also perform routine checks on transactions for

medications and supplies to better deter theft and waste of funds. With
proof of misconduct, the company may begin administrative proceedings
against the contractor or conduct an inquiry or continue with disciplinary
measures under federal fraud and harassment laws.

5-Dealing with third-party payers.

Health insurance providers and other third parties will also pay any or a
percentage of approved programmes' expense. Insurance providers earn
money, as you receive more discounts, the more customers an insurance
policy covers you. Healthcare finance administrators and elected leaders
bargain prices to preserve the most customers and obtain the required
payment for their care. Health care financial operations departments build
financial plans that support hospitals avoid complications involved with
entering into payer arrangements such as securing the best available
contracts.

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6-Long-term saving.

Long-term investments allow the health care unit to be better in the future.
Finance departments are in control of individual strategic decisions and
feedback from the organization's highest levels. Using their experience,
investment practitioners assess whether such assets can improve or
decrease financial well-being.

They would need to assess the expense to upgrade their technology,

determine how well it will benefit from drawing new patients or providing
savings in other areas.

7- Lending or Financing.

Finance administrators regularly tend to collect funds when their expenses

outweigh their profits. They attain their needs by various methods, including
donations, fundraising, grants, and government support. They make their
choices dependent on the cost/benefit ratio of a specific investment or debt
form. The senior manager typically takes the ultimate judgment and may
bring along a third party to help decide whether they require the
preparation.

8- Working capital management.

The working capital of a company comprises both the current assets and the
liabilities. Resources involve assets such as currency, marketable securities
and receivables (Dalci and Ozyapici, 2018). By controlling resources,
companies maximize their productivity and reduce costs. Government
departments and hospitals need to partner in identifying solutions to
minimize operating liquidity.

9- Economic reporting

Everybody has a risk management unit, even though it's not specified.
Healthcare hazards bear far greater risk than in most sectors, and patients
are at risk for injury and life and death. The governing boards are
responsible for monitoring the healthcare sector's financial regulation,
ensuring that the industry remains financially solvent, but still ensuring the
quality and well-being of the patients. There are also different people
interested in financial accounting, such as the Chief Executive, Finance
Officer, and Accountant. By introducing high-quality management tools
such as Board Impact, boards should be as trained as possible to make wise
decisions, and better monitor their activities.
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References

1- Dalci, I. and Ozyapici, H., 2018. Working capital management policy in

health care: The effect of leverage. Health Policy, [online] 122(11),
pp.1266-1272. Available at:
https://www.sciencedirect.com/science/article/abs/pii/S016885101830
513X.
2- Drummond, M. and Davies, L., 1991. Evaluation of the costs and benefits
of reducing hospital infection. Journal of Hospital Infection, [online] 18,
pp.85-93. Available at:
https://www.sciencedirect.com/science/article/abs/pii/0195670191900
08V.
3- Gaynor, M. and Anderson, G., 1995. Uncertain demand, the structure of
hospital costs, and the cost of empty hospital beds. Journal of Health
Economics, [online] 14(3), pp.291-317. Available at:
https://www.sciencedirect.com/science/article/abs/pii/0167629695000
042.
4- Li, L. and Collier, D., 2000. The role of technology and quality on hospital
financial performance. International Journal of Service Industry
Management, [online] 11(3), pp.202-224. Available at:
https://www.emerald.com/insight/content/doi/10.1108/095642300103
40715/full/html?queryID=3%2F5405594.

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