Question

In 3-4 paragraphs, explain why it is important to study health care finance specifically, versus business finance in general. What is the difference?

Answer 1

Health care finance deals in generation, allocation and use of financial resources in the health system. It includes management of funds for the medical resources. This type of finance refers to payments relating to hospital care, prescriptions and other medical services.

On the other hand, business finance includes the funds and credits employed in the business. Finance is the foundation for any business. The various finance requirements include purchase of assets, goods, raw materials and for the flow of other economic activities.

It is important to study health care finance specifically for the following reasons:

1. Finnacial management in health cre requires exceptional skill

2. There are lot of changes in the health sector which include specific coding sysyem of billing and advent of electronic medical records

3. The health care industry is so challenging since the industry changes so fast

4. These are non profit orgaisations unlike the other business and hence the accounting treatment differs and there are special norms concerning these sectors.

5. The health care industry is a service industry.