Question

List the major financial measures which are monitored by financial managers in the U.S. healthcare industry and, for each measure, provide one or two examples of decisions that might be informed by that measure. Finally, identify the one or two measures you think are most important for the survival of a healthcare organization and explain why you think they are most important. PLEase provide one recent reference. Thank you

Answer 1

Major financial measures which are monitored by financial managers in the US healthcare focus on the efficiency and profitability of healthcare industry. Financial analysts provide these managers with information that would help them make smart decisions, efficient internal spending practises. Accumulate enough revenues to bear the costs and finance their future endeavours, monitor each department and reviewing the prices of their services to correspond to market prices.

One measure which hold importance in growth of healthcare services is access to capital. Though it contributes a small proportion of healthcare expenditure but it holds importance in moulding the healthcare system itself.

capital assessment depends on whether the healthcare institution is governemnt owned, private or not for profit to distinguish between their capital expenditures.

Financial capital is required for inputs in the production of healthcare services like rent for space, equipments,human capital, supplies etc. These incure sunk cost which are borne over a long period of time and distributed over the revenues generated by the institution. there are also working capital assets to finance the on going investments and costs per unit variable factors.

healthcare providers gets funds in the form of grants,stocks,debts,philanthropy,funds from past operations etc. healthcare also gets interest free loans from governments

Thus, capital expenditure will continue to hold greater importance in healthcare services as it is also required not just to sustain current trends but also for future growth prospects.