Case Study:
Write a response to each discussion question.
2.1 Ashley
The National Library of Medicine, defines managed care as programs or organizations "intended to reduce unnecessary healthcare costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases" (Nguyen, 2009). In other words, trying to reduce the cost of health care and improving the quality of care at the same time.
One of the proposed ideas to assist in resolving the national deficit has been through the system that is referred to as Managed Care (MC) via Accountable Care Organizations (ACO), which was initiated in the 1990s (Arroyo, Daniel, Graves, Neal & Coustasse, 2016). The simple idea of an ACO is to formulate a unit consisting of a local health care organization and or a related set of clinicians that can take responsibility for both the cost and quality of care rendered to a defined population (Arroyo, Daniel, Graves, Neal & Coustasse, 2016). It is not secret that quality of care and cost of care in the United States has been terrible. Utilizing ACOs could benefit providers, insurance companies and also United States deficit.
2.1 Heard
One way managed care organizations try to introduce market mechanisms into healthcare is the preferred provider organization (PPO), which offers more flexibility in choosing practitioners than HMOs but which still offers incentives for seeing selected practitioners. PPOs are networks of practitioners that are most often organized by insurers, managed care organizations, or groups of practitioners. The networks contract with groups of practitioners who agree to provide services for a negotiated fee schedule (HIAA, 1996). Individuals who want to see a practitioner who is outside of the network can do so, but there will be a financial penalty.
2.1 Kelly
Managed care organizations can introduce market mechanisms into health care organizations by the benefits they offer to their employees. Many companies offer health savings accounts along with high deductible health insurance plans. If the employee participates in a wellness scan, they are subject to an employer paid funds into their health savings accounts. Some organizations also offer more money depending on the score the employee gains on their wellness exams.
2.2 Taylor
The basis for all accounting theory is: Assets = Liabilities + Owners' Equity. How the equation works is the value of the assets will always equal the value of the claims (whether liabilities to others or the owners) on those assets. A balance sheet has 2 sides: On the LEFT side are the Debit accounts (Assets); cash, accounts receivable, and equipment. On the RIGHT side are the Credit accounts (Liabilities/Equity); accounts payable, notes payable, long-term debt, and equity as stated by (accountingcoach.com).
From my understanding an example of this equation would look something like this hopefully. First entry; using $10,000 of my cash to start a business. That would be recorded as an entry to the Asset side of the books as cash and a similar entry would be made to the Equity (right) side of the books (Equity).
Second entry if you used $1,000 of your cash to purchase supplies for your business, your "Cash" balance would be reduced by $1,000, but you would record a different asset (Equipment) of $1,000 (investopedia.com).
2.2 Buda
The basic accounting equation is assets = liabilities + owner's equity (Vanzante, 2013). This equation shows the relationships between assets, liabilities, and owner's equity, also known as net worth. Assets are resources that have future benefit for the organization including items such as supply inventory, cash on hand, and accounts receivable (Baker & Baker, 2014). Liabilities are obligations or items that the organization owes to outside entities such as accounts payable or taxes (Baker & Baker, 2014). Owner's equity, or net worth, are the claims held by the owners of the business.
The parts of the equation need to be in balance; if liabilities exceed owner's equity, there are no assets (Baker & Baker, 2014). On the reverse side, if there are few liabilities and a large owner's equity, there are too many assets, and some of that asset surplus should be expended to grow the business.
2.2 DB Mazanec
ASSET = LIABILITY + EQUITY. This is the basic accounting equation. MissCPA (2012) describes the equation as "business resources (assets) that are attributable to the amount owed to creditors (liabilities) and capital invested by owners (equity)." The equation must always equal and balance.
Assets refer to resources available that are used to operate the business (misscpa.com, 2012). Examples of assets on the hospital balance sheet include, cash, inventory, accounts receivable, short and long-term investments, third party payor settlements, and property, plant, and equipment.
Liabilities refer to the amount of debt an organization owes outside the operation, otherwise considered creditors' claims against the assets of the organization (misscpa.com, 2012). Types of liabilities on the hospital balance sheet are split into current and long-term liabilities and include bonds and notes payable, capital leases both short and long-term, accounts payable, accrued salaries and other payroll related liabilities, and interest payable.
Equity is the term used to describe the owner's investment in the operation, whether it be capital or resources (misscpa.com, 2012). Equity is represented by many terms depending on the type of organization or company: capital, drawing, common stock, additional paid in capital, retained earnings, net income, or net loss. The term used in our facility, a not-for-profit hospital, is fund balance, restricted and unrestricted. Equity is determined by the performance shown on the Income Statement. Net income (or increase in net position) will increase the equity, whereas a Net loss (or decrease in net position) will lower the equity on the balance sheet.
Because this is the basic accounting equation, if the fundamentals of the formula are not understood, the rest of the financial process will not be successful.