Full Description
Learn the essentials of finance theory and practice with the tools needed in day-to-day practice In this thoroughly revised and updated fourth edition of Fundamentals of Health Care Financial Management, consultant and educator Steven Berger offers a practical step-by-step approach to understanding the fundamental theories and relationships guiding financial decisions in health care organization. Using cases set in a fictional mid-sized hospital, the book takes the reader into the inner workings of the finance executive's office.
As in the previous editions, this book introduces students to key practical concepts in fundamental areas of financial management. This innovative introduction to the most-used tools and techniques includes health care accounting and financial statements; managing cash, billings and collections; making major capital investments; determining cost and using cost information in decision-making; budgeting and performance measurement; and pricing.
Also covered in depth are the financial implications of Patient Protection and Affordable Care Act, which will increase patient volume, reduce bad debt, factor quality and patient satisfaction into the financial picture, and significantly affect how hospitals and physicians are paid for services.
Students focusing on the business side of health care will find Fundamentals of Health Care Financial Management: A Practical Guide to Fiscal Issues and Activities, 4th Edition a valuable text for understanding the workings of the health care financial system.
Contents
Figures, Tables, and Exhibits vii
Preface xv
Acknowledgments xix
The Author xxi
Chapter 1: January 1
What Is Health Care? 3
What Is Management? 5
What Is Financial Management? 6
Why Is Financial Management Important? 8
Ridgeland Heights Medical Center: The Primary Statistics 9
Pro Forma Development 13
Living with the Finance Committee and Board of Directors' Calendar 19
Year-End Closing 24
Chapter 2: February 31
Accounting Principles and Practices 32
Objectives of Financial Reporting 34
Basic Accounting Concepts 35
Basic Financial Statements of a Health Care Organization 36
Uses of Financial Information 37
The Financial Statements 39
Preparing for the Auditors 52
Analysis of Sensitive Accounts 54
February Finance Committee Special Reports 56
Chapter 3: March 61
Strategic Financial Planning: Five-Year Projections 63
RHMC Strategic Financial Planning 67
Ratio Analysis 74
The Capital Plan and Its Relationship to the Strategic Plan 84
Chapter 4: April 91
Medicare and Medicaid Net Revenue Concepts 94
Calculation of Medicare and Medicaid Contractual Adjustments 100
Implications of the Balanced Budget Act of 1997 109
Implications of the Medicare Modernization Act of 2003 115
Implications of the Patient Protection and Affordable Care Act of 2010 (PPACA or ACA) 117
Managed Care Net Revenue Concepts 131
Preparation of the Medicare and Medicaid Cost Report 137
Presentation of the Audited Financial Statements to the Finance Committee 140
Chapter 5: May 145
Fundamentals of Revenue Cycle Management (RCM) 146
Calculation of the Allowance for Doubtful Accounts and Bad-Debt Expense 165
Calculation of the Allowance for Contractual Adjustments 170
Chapter 6: June 175
Budget Preparation: The Beginning 177
Budget Calendar 177
Volume Issues 185
Capital Budgeting: June 190
Accounting and Finance Department Responsibilities 195
June Finance Committee Special Agenda Items 198
Chapter 7: July 203
Budget Preparation: The Middle Months 204
Capital Budgeting: July 221
Regulatory and Legal Environment 223
Other Regulatory and Business Compliance Issues 227
Corporate Compliance 228
Accreditation Issues 229
Patient Satisfaction Issues 232
Chapter 8: August 235
Capital Budget: August 236
Operating Budget 246
Budget Variance Analysis 249
Budget Variance Parameters 252
Flexible Budgeting 252
August Finance Committee Special Agenda Items 260
Chapter 9: September 263
Operating Budget 265
Capital Budget: September 275
Cash Budget 277
Physician Practice Management Issues 280
Current Physician Practice Issues—2013 292
Additional Physician-Hospital Integration Issues 294
Monthly Physician Reporting 295
Chapter 10: October 299
Information Systems Implications for Health Care Financial Management 301
Information Technology Strategic Plan Initiatives 304
HIPAA Implementation Issues 306
Selection of a New Health Care Information System 310
Budget Presentation to the Board Finance Committee 316
October Finance Committee Special Agenda Items 328
Chapter 11: November 331
Preparation of the Budget Results and Delivery to the Department Managers 333
Budgeting and Spreading Contractual Adjustments by Department 337
Issues Involving RHMC's Cost Structure 340
How to Improve the Organization's Cost Structure 344
Supply Chain Management in Health Care 352
Benefits of Tax Status for Health Care Organizations 356
Preparation and Implications of the Annual IRS 990 Report 360
Chapter 12: December 367
Getting Ready for Year-End Reporting—Again 371
Open-Heart Surgery Pro Forma 371
December Finance Committee Special Agenda Items 380
Looking into the Future of Health Care Finance 383
Future Conclusions 397
References 401
Index 407
