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(Ebook PDF) (Ebook PDF) Introduction To The Financial Management of Healthcare Organizations, Sixth Edition All Chapter
(Ebook PDF) (Ebook PDF) Introduction To The Financial Management of Healthcare Organizations, Sixth Edition All Chapter
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BRIEF CONTENTS
Preface.....................................................................................................................xvii
Acknowledgments...............................................................................................xviii
vii
Preface.....................................................................................................................xvii
Acknowledgments...............................................................................................xviii
ix
I
ntroduction to the Financial Management of Healthcare Organizations is intended to be the
primary textbook in introductory courses in healthcare financial management at both
the undergraduate and graduate levels as well as a reference book for program graduates
and other practicing healthcare managers. The purpose of this book is to introduce students
and managers in positions other than finance to the fundamental concepts and skills nec-
essary to succeed as managers in an increasingly competitive employment environment.
For instance, program graduates find employment in a variety of healthcare set-
tings. Therefore, the focus of this book—as well as the title of the book—extends beyond
the hospital. Program graduates consistently report a deficiency in quantitative skills; this
book includes problems representing key concepts. Traditional-age students report a need
to apply the quantitative skills introduced in financial management. To address both of
these concerns, this book includes mini-case studies within chapters, practice problems at
the ends of many chapters, and a comprehensive case study at the end of the book.
Introduction to the Financial Management of Healthcare Organizations is part of
Health Administration Press’s Gateway to Healthcare Management series. The textbooks
in this series are geared specifically to students who are new to healthcare management.
In this edition, Part I includes an overview of financial management; the organization
of financial management, including updated information on job responsibilities and salaries;
financial analysis and management reporting; and the tax status of healthcare organizations,
including the most recent court cases differentiating for-profit and not-for-profit hospitals.
Part II includes information about third-party payers and payment methodologies;
Medicare and Medicaid, including updated laws pertaining to these public programs as
xvii
well as federal government settlements with providers on fraud and abuse allegations; cost
accounting and analysis; and reimbursement, including charge setting.
Part III covers the management and financing of working capital; the management
of the revenue cycle, including the distinction between the revenue cycle and accounts
receivable; and materials management.
Part IV focuses on resource allocation and includes strategic, strategic financial, and
operational planning; budgeting; and capital budgeting.
Finally, Part V provides an analysis of trends that will affect healthcare organizations
in the future, including healthcare cost projections and the need for entitlement reform.
The Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIPS Reauthori-
zation Act (MACRA) of 2015 are discussed throughout the book but more prominently
in Parts II and V.
Each part of the book includes its own recommended reading list. A running glos-
sary of important terms accompanies each chapter and is compiled at the end of the book;
a list of acronyms used in the text is also included at the end of the book. At the end of
every chapter, important points and discussion questions encourage students to summarize
what they are learning and put it into their own words. The chapters are modular to allow
instructors to either delete specific chapters or assign the chapters in an order based on
individual preference or classroom requirements.
I hope you find Introduction to the Financial Management of Healthcare Organizations
relevant, current, and easy to understand.
A c k n o w le d g m e nts
I would like to gratefully acknowledge those who assisted me in this seventh edition: my
wife, Tracey, and our kids, Hannah and David, who have often sacrificed time with Dad
so that I could write; my many students over the years, who have challenged me to find a
better way to explain, teach, and evaluate the understanding of difficult concepts; Thamarai
Selvi Sundararajan, my graduate assistant, who helped proofread the book and provided the
valuable supplemental materials; Texas State University for continuing to support faculty
research efforts; and Dick Clarke, president emeritus of HFMA, who in ways too numer-
ous to mention has always supported my academic career. Finally, special thanks to those
at Health Administration Press who have made this seventh edition what it is.
—Michael Nowicki
I n s t r uctor R esourc es
This book’s instructor resources include a test bank of multiple choice questions;
additional short-answer and fill-in-the-blank questions; PowerPoint slides in both
outline and Socratic formats; and answer guides for the in-book discussion
questions, mini-cases, and end-of-book case.
For the most up-to-date information about this book and its instructor resources,
go to ache.org/HAP and browse for the book by its title or author name.
This book’s instructor resources are available to instructors who adopt this book
for use in their course. For access information, please e-mail hapbooks@ache.org.
FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT IN
CONTEXT
No matter where you are in the healthcare finance arena, there are opportunities
to move things forward, to act, to resist complacency, to refuse to allow yourself to
think that things won’t ever change. As finance professionals we all have strengths
that will serve our organizations well in these times of change.
Learning Objectives
I n t r o d uc t i o n
Successful organizations, whether for-profit, not-for-profit, or governmental, have two
things in common: (1) a congruent and well-understood organizational purpose, and (2)
a functional management team. The purpose of this introductory chapter is to describe
financial management in healthcare organizations within the context of organizational
purpose and a competent management team.
O r g a n i z at i o n a l P u r p o s e
Organizational purpose is often determined by the owner. While a community-owned,
not-for-profit healthcare organization’s purpose is to provide healthcare services to the com-
munity, a corporate-owned (via stockholders) for-profit healthcare organization’s purpose
is to provide profit for the owner.
By necessity, most organizations have more than one organizational purpose. For
instance, even though a not-for-profit healthcare organization’s purpose is to provide health-
care services to the community, the organization must survive economically—meaning that
it must generate sufficient revenue to offset expenses and allow for growth. A for-profit
healthcare organization’s purpose is to provide profit for the owner; however, the organi-
zation must meet its customers’ needs—meaning it must keep the physicians, patients,
employers, and insurance companies satisfied.
Most healthcare organizations also have secondary purposes—for example, many
government-owned healthcare organizations provide large-scale medical education programs.
To maintain congruence, the management team must communicate the organiza-
tional purpose or purposes not only to the employees but also to owners, customers, and
other important constituents. When multiple purposes are present, the management team
must prioritize the purposes.
H e a lt h c a r e M a n a g e m e n t T e a m
In its broadest context, the objective of healthcare management is to accomplish the
organizational purposes. Doing so is not as simple as it sounds, especially if the health-
care organization’s purposes are “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” (Berman, Kukla, and Weeks 1994, 5). Healthcare managers must
identify, prioritize, and often resolve these sometimes contradictory purposes in a politi-
management functions cal environment that involves the organization’s governing board and medical staff; in
The key functions of a regulatory environment that involves licensing and accrediting agencies; and in an
a manager, including economic environment that involves increasing competition, resulting in demands for
planning, organizing,
lower prices and higher quality.
staffing, directing, and
Competent healthcare managers attempt to accomplish the organizational purposes
controlling.
by planning, organizing, staffing, directing, and controlling (called the management
Samoin kuin hän ei ollut vuosikausiin ollut näin terve, ei hän ollut
myöskään ollut niin kaunis, niin onnellinen…
»En ikinä enää anna hänen koskea siihen —» Yhä edelleen hän
taivalsi tweedkankaisen hameensa käydessä yhä raskaammaksi
sadepisaroista, joita siihen tarttui cystus-, vermutti-, lavendeli- ja
villeistä rosmariinipensaista, joiden välitse hän tunkeutui
tarkkaamatta ympäristöään. Kerran hän oli kuulevinaan tuulen
kantamaa kellojen kilinää.
VI
VII
VIII
IX
Niin, maantiellä.
Hän oli saapunut maantielle… joka vei pois sieltä. Mitä hänen oli
tehtävä? Seurattavako sitä? Kumpaan suuntaan?…
Muutamilla askelilla hän pääsi oikealla olevan kallionnurkkauksen
taakse. Siellä odotti uusi yllätys, ja hän jäi töllistelemään suu auki.
Siellä oli perin sivistysmaailman tapainen tienviitta, johon oli
räikeänkeltaiselle pohjalle isoilla mustilla kirjaimilla maalattu:
»DON DE DUNLOP»
»Attention au virage»
*****
Hänen lauseensa katkesi äkkiä, sillä hän oli nähnyt. Hänen siniset
silmänsä laajentuivat tummien, tuuheiden kulmakarvojen alla ja
kiintyivät muulinkenkään, jonka Margaret oli pistänyt vyöhönsä. Hän
tuijotti äänettömänä.
Äänettömyys.
XVI luku
Puhelua
Niin kiihtynyt kuin Margaret olikin, oli hänen aluksi nälkä; hän ahmi
puolitusinaa voileipiä — jotka, kuten hän nyt tiesi, eivät olleetkaan
mitään rantaan ajautunutta haaksirikkotavaraa, vaan jotka oli
äskettäin kiltisti ostettu jostakin ranskalaisesta
ruokatavaramyymälästä sisämaassa (missä se sitten olikin). Hän
kuvitteli mielessään pientä, kahvituoksuista pesää, sen
ilmoitustauluja, joissa tarjottiin makeisia ja piparminttuja, sen
sipuliverkkoja ja ovelle sijoitettuja valtavan isoja, kadmiuminkeltaisia
kurpitsoja. Hän nieli vähän rohkaisevaa curaçaolikööriä (joka
myöskin oli samasta kaupasta peräisin), ennen kuin huomautti:
»Kyllä.»
»En toki; kyllä tiedän, ilmeisesti. Mutta olen antanut sanani siitä,
etten anna teidän sitä tietää, niin kauan kuin olemme täällä.»
»Juuri niin.»
»Sedälleni kaiketi?»
»Oliko muita?»
»Ette kyllä; ette ole väittänyt sitä. Missä setäni nyt on?»
II
III
»Missä on purtenne?»
»Satamassa.»
»Ikävä kyllä, mutta minun ei ole sallittu mainita teille mitään nimiä.
Annoin sanani. Ymmärrättehän, neiti Verity?»
IV