1. Discuss the concept of a hospital as a business and the need for financial management of health care businesses.
2. Define how health care organizations are paid for services.
3. Understand the varying types of reimbursement to hospitals and the operational challenges of these payment methods.
4. Describe the three primary financial statements and what they measure.
5. Define working capital and discuss how operations management influences it.
6. Identify sources of financial data for use in operational analyses.
DISCUSSION QUESTIONS
1. Why should operations managers understand financial statements?
2. What constrains a hospital's revenue?
3. Compare and contrast the incentives to health care providers under a fee-for-service reimbursement mechanism versus a prospective payment mechanism.
4. What are the three key financial statements that business managers should be aware of, and how are they related?
5. What is the logic of the order of the assets listed on the balance sheet?
6. What is a financial ratio? What value does it provide?
7. Why do organizations have their statements audited? What assurance does it provide?
8. What is the principal difference between the direct and indirect methods for preparing the cash flow statement?
EXERCISE PROBLEMS
1. A hospital has $25 million in gross revenues and $12 million in net patient revenues. What is the average deduction percentage for that period?
2. The same hospital has $40 million in current assets and $30 million in current liabilities. During a 30-day month, it incurred total operating expenses of $10 million. How many days of working capital did it maintain this period?
3. Using the income statement and balance sheet examples provided in the chapter, calculate the return on capital in 2013.
Attachment:- Assignment.rar