Financial Planning and Health Care Institutions

Over the past two decades, the financial environment within which health care institutions in the United States function changed dramatically. Perhaps the most apparent change to most people is the ascendancy of the managed care concept. For financial managers with the health care sector, however, the changes in payment protocols from retrospective to prospective to capitation that accompanied the ascendancy of managed care also ushered in different approaches to and requirements for accounting, financial planning - budgeting, and financial control in health care institutions.

This paper reviews the financial environment within which health care financial administrators perform their functions and discharge their responsibilities today. Broadly, the structure of the review addresses the three major areas of interest mentioned ù accounting, financial planning - budgeting, and financial control in health care institutions. The review also addresses sub-topics and ancillary issues within these major interest areas that also affect the functioning of health care financial administrators.

Accounting in Health Care Institutions

When the transitions in the financial environment for health institutions in the United States began two decades ago, most large health care institutions were not-for-profit institutions that were reimbursed within a retrospective payment frame

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ation of the best information about "operating" cash flows (quality). 2. The second objective is the capability of a presentation method to "stand alone" ù require the presentation of other financial statements. 3. The third objective is that the presentation is understandable to readers of governmental financial statements who possess little or no expertise in accounting. 4. The fourth objective is that the method provides the clearest presentation of the results of cash flows from operations (clarity). 5. The fifth objective is that the method does not present unnecessary information about "operating" cash flows (brevity). In evaluating the "quality" objective (number one), an important issue is which format best reports cash flow information that is not available in other financial statements. The direct method uses terms that are similar to but not the same as terms in other financial statements. "For example, 'other operating revenues' also may be found in the operating statement. In the operating statement, the amount represents what was earned as measured by the accrual basis of accounting. In the SCF, however, the amount reported is the amount of cash received from this source. Other terms, such as 'cash rece
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Some common words found in the essay are:
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Approximate Word count = 6092
Approximate Pages = 24 (250 words per page)