Financial Environment Essay

IntroductionWith recent big changes in healthc ar legislation, health c be organizations are moving towards a system that changes reimbursement procedures. Health business organizations will be reimbursed by the government found on the quality of care allowd by that organization. The Affordable Care Act (ACA) requires certain steps to hand Medicare more than resourceful by decreasing the amount of overpaid funds to insurance companies, adjusting reimbursement rates to levels that are more suitable, and altering payment scales and systems to support the delivery of efficient, premium health care (Centers For Medicare & Medicaid Services, 2013).There are several different fictitious characters of health care organizations that offer medical operate to patients. Because of the many different work and organizations in healthcare, the financial aspect of health care is non so cut and dry. Health care organizations can be described as either for-profit, not-for-profit, or part of a government organization. rough examples of these health care organizations are hospitals, nursing homes, health insurance companies, and home health care agencies.Gapenski (2008) explains that he healthcare field is different from any separate field mainly because of two factors. Unlike other types of services, most healthcare providers and organizations are structured as not-for-profit rather than being owned by an investor. other study factor that contributes to its uniqueness is the fact that payment is made by a third companionship rather than the individual who receives the services.For-profit OrganizationsThe Watermark at Logan Square, Tenet Healthcare, and Hospital ManagementAssociates (HMA) are just cardinal examples of for-profit health care organizations in todays market. These are investor owned organizations that moldiness pay taxes and do not receive the same benefits that not-for-profit organizations receive. For-profit healthcare organizations are owned by inv estors. In terms, this means they energize shareholders who benefit directly from any profits that are regressd from this organization. Unlike, not-for-profit organizations, these for-profit organizations do not usually have the explosive charge of taking on charity work or cases.Not-for-profit OrganizationsNot-for-profit hospitals are nongovernment entities that are organized with the main finishing of providing inpatient healthcare services. Three examples of not-for-profit healthcare organizations include The Hospital of the University of Pennsylvania (HUP), Memorial 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 exclusively to the interest of the public. Non-profit organizations were formed with the purpose of servicing the unavoidably of the less fortunate.This later led to non-for-profit hospitals being free from paying taxes because of the fact that th ey were providing certain social services. collectable 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 real economy, Ebrahim (2010) explains that not-for-profit organizations stand out more in the area of public policy and the delivery of public services than they have ever before. Currently, the existing economic crisis has caused cuts in funding 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 once given, it takes a people of budget restructu re 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 produce 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 accept tax-deductible contributions. The two different types of organizations slackly have different ways of handling 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 mete out new shares or ownership interests.Governmental OrganizationsGovernment organizations, like not-for-profit organizations, have no stock holders who receive the stay assets when they are liquefied. Government health care organizations offer care to patients at a certain woo or agreed fee. The patient is responsible for a certain amount and the insurance is responsible for the balance wheel 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). basic principle of health care financial management. A practical 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 action challenges. Journal Of Policy Analysis & Management, 29(3), 628-632. Gapenski, L. C. (2008) Healthcare finance An introduction to accounting and financial management. (4th ed.). Chicago, IL crosstie of University Programs in Health Administration. 0 replies 0 drafts