Question

What concepts are unique in the accounting of health entities? Consider the following aspects before answering the question:

How are medical service providers paid and why do different patients pay different amounts of money for receiving the same service?
What is the payment system to third parties?
Why are some charges for medical services reported by the provider as sales income?
And about the regulations by the government?

Answer 1

In healthcare industry there are huge turnout of transactions and a lot of cost center's. To manage such a huge turnout the industry have to be a unique concept and techniques. The health entities are need to have an ERP system so that can manage its accounting smoothly.

Medical service provider paid some part by government and some part by patients. As the medical services are generally subsidised and hence the deferent types of patients paid deferent fee according to there economic, social, political etc. capacity by receiving the same services.

Payment system to third parties are the system by which third parties are making payment for the patient as in today's almost every one getting medically insured and in any unfavourable situation the insurance company making payment on behalf of the patient.

While providing medical services medicine and other medical tools are required to use and that things like medicine, medical equipment, healthcare parts are neccenece to provide the medical services and that part are reported as sales income as it is not a service as its not involved service it is sold as medicine and medical accessories.

The Government are very strict about the quality and services of medical professionals and it is one of the primary responsibility of the government to provide medical services to its citizens and therefore medical industry are well regulated by the government.