Question

How can corporation rules, government regulations, and accounting standards impact health care financial management. Provide an example.

Answer 1

The government has many regulations placed on health care. These programs are funded through the state government or the local government. So, if a funding for a hospital is over the top for a certain yearthen the government can cut off funding or pressure the hospitals or clinics to provide alternative services, such as sending doctors to give back to the community or seeing less patients that are part of government programs such as Medicare, and Medicaid. Having such government plans pushes up the cost for the government to pay for people thus, increasing costs and rules on the non-governmental programs. Corporation requires everyone to have some sort of insurance, whether its through their employer or through Obamacare. Those that don’t have insurance of some kind have to pay back in taxes, at the end of the year. This is a fixed wage.

Government regulation affects the financial services industry in many ways, but the specific impact depends on the nature of the regulation. Increased regulation typically means a higher workload for people in financial services, because it takes time and effort to adapt business practices that follow the new regulations correctly.

While the increased time and workload resulting from government regulation can be detrimental to individual financial or credit services companies in the short term, government regulations can also benefit the financial services industry as a whole in the long term. The Sarbanes-Oxley Act was passed by Congress in 2002 in response to multiple financial scandals involving large conglomerates such as Enron and WorldCom. The act held senior management of companies accountable for the accuracy of their financial statements, while also requiring that internal controls be established at these companies to prevent future fraud and abuse. Implementing these regulations was expensive, but the act gave more protection to people investing in financial services, which can increase investor confidence and improve overall corporate investment