costs (cost must be continuosly monitored to ensure), cash (Business must have sufficient cash on hand to meet payment obligation), capital (Business must raise capitals), control (Must control their resources)
Importance of Finance over Time: when most healthcare services organizations were reimbursed on the basis of costs incurred, the role of finance was secondary. Today however the finance functions has increased in importance. There are no unimportant functions in health services organization. Operations human resources, facilities and so on are all essential to mission accomplishment. CFO:
Chief Financial Officer Senior manager in finance department. They control Comptroller and Tresurer
Different Types of Organizations:
Hospital (Inpatient care), Ambulatory (out patient care), Long term care, Integrated delivery system
Land, buildings, equipment, inventories
4 major types of busines catatgories:
Proprietorship, Partnership, Corporations, Hybrid forms
Proprietorship & Partnerships
*ease of informations* Few regulations* Nor corporate income tax (Advantages)
*Limited life * difficult to transfer ownership * Unilimited liability * Difficult to raise capital (dis)
(limited partnership): General partners: have control , Limited partners: are liable only for their initial contribution
(limited liability parternship) * partners share general business liability , but they are liable only for their own malpractice actions
(limited liability corporation) Members are taxed like partners, liability like stockholders
For profit: investor owned business
Investors became owners by purchasing shares of common stock. Stockholders have : right control , claims on residual earnings+ residual liquidation proceeds.
Not for profit:
No shareholders, receive various tax exceptions, can be roughly thought of as being owned by the community , required to fill for 990, attach schedule H info about charity care) organizational goals: For profit: shareholders wealth (stock price) maximization Not for profit: to ensure the financial viability of the organization
Investor owned corporations stems from their organizational goals shareholders wealth maximization
Not for profit: to ensure the financial viability of the organization.
What is Part A: Inpatient care (hospitals, skilled nursing facilities, hospice, home health care) Part B: Out patient care (medical insurance doctor’s visi/ services) Part C: advantage plan (HMO, PPO) (Medicare that covers both Part A and Part B) Part D: Medicare pharmacy/ Prescriptions plan
How hospitals or physician get reimbursed or billed? Fee for services
Different healthcare providers:
Hospitals, physicians, outpatient facilities, home health agencies, home medical ewuipment
7 componenets of PPACA (patient protection and affordable care act) eliminates annual and lifetime coverage caps for patients, eliminates copay for essentials services, individual must have insurance or pay penalty, eliminates pre exsting condition, exclusions, state exchanges stablished so customers can compare premiums and plan in state, creates ACOs to be accountable for members healthcare, shifts some medicare payment from fee for service to payment for bundles services
Why to use ICD 10?
Due to requirement for claims submission and payments
Who will have hard time in implementing ICD 10?
1977 all payor system unit rates related to underlying cost of uncompensated care
pooling of losses, payment only for random losses, risk transfer, indemnification
Adverse selection those wit the greater risk are more likely to purchase insurance
Moral hazard overuse of health services or forgoing of prevention becasue the individual doesn’t bear