Health Care Financial Accounting
According to the American Medical Association’s Code of Medical Ethics, “a physician shall support access to medical care for all people. This principle becomes an ethical dilemma, however; in our currently divided system in which those without insurance are not provided the same access to health care as those with insurance. Health care providers are continually obligate to balance the increasing need for cost containment and appropriate allocation of medical resources with their professional ethical obligation to “regard responsibility to the patient as paramount” when making clinical decisions. In today’s health care industry there are many topics for debate. Issues such as the implementation of patient protections affordable care act (PPACA), to issues of ethical practices of health care finances and the proper reporting of such. Healthcare managers participate in various important roles that allow them to form and maintain flourishing organizations. Managers ought to be aware of the decisive elements of management and the generally accepted accounting principles. At the same time, they must realize, stick to, and put into effect the general financial ethical standards. Successful management of finances of healthcare is one of countless tests that mug the organization. Revenues and expenses of the organization are essential because they establish the external and internal finances of the company. The indispensable skills needed to administer the finances of the health care organization are to plan, budget and handle the revenue sets.
Accounting professionals must tolerate the ethical standards that regulate the kind of business they conduct, who they serve, and how they use their skills. Within the health care industry and largely the business world, there are four widely recognized elements of financial management The Generally Accepted Accounting Principles (GAAP) are rules in which regulations and guidelines are follow in the United States by accountants to make sure that they are legal and ethical in their standard for managing accounts, when they prepare the company statements. Generally Accepted Accounting Principles (GAAP) is concerned with: (1) the measurement of economic activity, (2) the time when such measurements are to be made and recorded, (3) the disclosures surrounding this activity, and (4) the preparation and presentation of summarized economic information in financial statements. Without GAAP, companies would be free to decide for themselves what financial information to report and how to report it, making things quite difficult for investors and creditors who have a stake in that company (“General Accepted Accounting Principles or Gaap: What does It Mean?” 2008).
The managers within a health care organization will have generally one of three views: (1) Financial, (2) process, or (3) clinical. The way they manage will be influence by which view they hold. Financial view; these managers generally work with finance on a daily basis, reporting function is part of their responsibility and perform much of the strategic planning for the organization. Process view; managers generally work with the system of the organization and may be responsible for data accumulation and are often affiliated with the information system hierarchy in the organization (Baker & Baker, 2011).
Clinical view; managers generally are responsible for service delivery. They have direct interaction with the patients and are responsible for clinical outcomes of the organization (Baker & Baker, 2011). Generally Accepted Accounting Principles (GAAP), a standard and procedure in which companies use to compile their financial statements such as Balance sheets, Income statements, and Cash-flow statements, and a combination of authoritative standards and simply the commonly accepted ways of recording and