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Finance In Healthcare Essay

1110 words - 5 pages

Finance in the healthcare industry can be a very tricky subject. The primary role of finance in the health services is to plan for, obtain, and make use of resources to increase the productivity and value of the business (Nowicki 2007). Finance is a very important part of the health care industry. It keeps everything on track and in order so that things operate successfully. Without the right person(s) helping to operate the place of business the company can be in a great deal of trouble. When I think of finance I think of cash. In today’s economy cash flow is at its all time low. More people are trying to cut cost and much as they can. This means less doctor visits and sometime not going ...view middle of the document...

They develop and market drugs and other therapeutic products. Other group of healthcare industries includes businesses, consulting firms, educational institutions, governments and private research agencies. (Gapenski, 2008). The accounting and financial management are the two broad areas of health care finance. According to Gapenski, “accounting provides a rational means by which to measure a business’s financial performance and assess operations, whereas financial management or corporate finance provides the theory, concepts, and tools necessary to help managers make better financial decisions.” (Gapenski, 2008,) The relationship between both areas is that managers in health care fields estimate the assets needed to meet the projected demand; and the finance department raises the money needed to purchase the required land, buildings, equipment, and supplies. When running a company or any type of facility that’s for profit, it is important to understand the money aspect of the business. There are a lot of non-traditional healthcare settings outside of the traditional hospital setting. The internet now provides online customer service capabilities. With new information technology constantly emerging, the forms of payment and care delivery structures will need to be aligned. With the baby boomers entering into the retirement realm, facilities will have an increase in healthcare needs. Strategic plans will need to be revamped for recruitment, retention, and training, along with a host of other issues. The finance or management will be affected by all of these changes and challenges, so yes again, the role of finance in the health services industry has increased in importance.
One of the important things in finance is the balance sheet. The information on the balance gives insight about an organization’s assets and the financing used to acquire those assets ( Nowicki 2007). This is very important when you are trying to figure out what money is coming into the company or facility or what money is going out. Two articles that offer some more insight about balance sheets are The Federal Reserve Bulletin and the IMF Economic Review. These two articles are great references to the importance of this document. Balance sheets maybe thought of as a snapshot of the financial position of a business at...

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