Financial Environment Essay

gatewayWith recent big changes in healthc atomic number 18 lawmaking, health c be organizations are moving towards a system that changes reimbursement procedures. Health care organizations will be reimbursed by the government based on the quality of care provided by that organization. The Affordable Care Act (ACA) requires real(prenominal) steps to make Medicare to a greater extent resourceful by decreasing the amount of overpaid funds to insurance companies, ad well(p)ing reimbursement judge to levels that are more suitable, and altering payment scales and systems to support the delivery of efficient, tribute health care (Centers For Medicare & Medicaid Services, 2013).There are several diametric types of health care organizations that offer medical services to patients. Because of the m approximately(prenominal) dissimilar services and organizations in healthcare, the fiscal aspect of health care is non so cut and dry. Health care organizations can be describe as either for-profit, non-for-profit, or part of a government organization. near examples of these health care organizations are hospitals, nursing domiciles, health insurance companies, and home health care agencies.Gapenski (2008) explains that he healthcare field is different from any other field mainly because of two factors. Unlike other types of services, around healthcare providers and organizations are structured as not-for-profit rather than being owned by an investor. Another major factor that contributes to its uniqueness is the fact that payment is made by a third party rather than the atomic number 53-on-one who receives the services.For-profit OrganizationsThe Watermark at Logan Square, Tenet health care, and Hospital ManagementAssociates (HMA) are just three examples of for-profit health care organizations in todays market. These are investor owned organizations that must pay taxes and do not receive the said(prenominal) benefits that not-for-profit organizations receive . For-profit healthcare organizations are owned by investors. In terms, this means they contract shareholders who benefit directly from any profits that are ease upd from this organization. Unlike, not-for-profit organizations, these for-profit organizations do not usually keep up the mission of taking on charity range or cases.Not-for-profit OrganizationsNot-for-profit hospitals are nongovernment entities that are organized with the main goal of providing con healthcare services. Three examples of not-for-profit healthcare organizations include The Hospital of the University of Pennsylvania (HUP), memorialisation Sloan-Kettering Cancer Center, and The Cleveland Clinic. Gapenski (2008) explains that not-for-profit organizations must be structured and managed so that they operate entirely to the interest of the public. Non-profit organizations were formed with the purpose of servicing the needs of the less fortunate.This posterior led to non-for-profit hospitals being free fro m paying taxes because of the fact that they were providing sure brotherly services. Due to the fact that individuals can not benefit from the profits of not-for-profit organizations, dividends from these organizations cannot be paid (Gapenski, 2008). Not-for-profit organizations are also controlled by a board of trustees, which often times makes it hard to make certain changes or decisions without everyone in agreement.Because of the latest economy, Ebrahim (2010) explains that not-for-profit organizations stand out more in the area of public polity and the delivery of public services than they have ever before. Currently, the existing sparing crisis has caused cuts in financial support at both the state and local level. These financial cuts often times force many not-for-profit organizations to reduce the services offered. Obtaining funding with these setbacks is a major challenge for any nonprofit organization. When these organizations are not getting the funds they were o nce given, it takes a lot of budget reconstitute to not be incomplete deficit. It is still importantfor these organizations to gain some type of profit to be able to purchase more equipment, technology, or even land to help provide quality care.For-profit vs. Not-for-profitBoth for-profit and not-for-profit hospitals spring up revenues through their daily operations and interactions. Unlike not-for-profit hospitals, for-profit hospitals are able to generate funds by issuing stocks. On the other hand, not-for-profit hospitals can judge tax-deductible contributions. The two different types of organizations generally have different ways of intervention decisions regarding different financial and capital investments. A not-for-profit organization does not have the same opportunities for the capital structure that a for-profit organization does. In particular, a not-for-profit organization cannot sell new shares or ownership interests. political relational Organizations authorities or ganizations, like not-for-profit organizations, have no stockholders who receive the remaining assets when they are liquefied. Government health care organizations offer care to patients at a certain cost or agreed fee. The patient is responsible for a certain amount and the insurance is responsible for the remainder of the bill (Berger, 2008).ConclusionHealthcare finance is not always easy to grasp. It is important that one has a general understanding of how finances are managed in healthcare. It is essential for one to understand the differences in the types of organizations and it may help understand why certain decisions are made. It is also beneficial for one to stay updated on legislation in healthcare because it may directly shape the way that finances are handled.ReferencesBerger, S. (2008). Fundamentals of health care financial management. A applicatory guide to fiscal issues and activities. John Wiley & Sons.Centers for Medicare & Medicaid services. (2013). Retrieved from http//www.cms.gov/medicare-coverage-database/ Ebrahim, A. (2010).Nonprofit agency challenges. Journal Of polity Analysis & Management, 29(3), 628-632. Gapenski, L. C. (2008) Healthcare finance An introduction to accounting and financial management. (4th ed.). Chicago, IL Association of University Programs in Health Administration. 0 replies 0 drafts