Assignment
1. Describe the six basic accounting concepts that all healthcare managers should understand.
2. Why is financial ratio analysis crucial for understanding the financial position of a healthcare organization? Select any three of the commonly used financial ratios, provide the formula, and briefly explain what it tells us about the status of the healthcare facility.
3. Why is payer mix so important in healthcare strategic financial planning? What could happen if a healthcare organization's payer mix changed substantially from one year to the next?
4. Explain the difference between fixed and variable costs for a healthcare organization. Provide and discuss at least one example of a fixed cost in health care and one example of a variable cost in health care.
5. List and briefly describe the most important areas of the healthcare revenue cycle.
6. Explain how to calculate the allowance for contractual adjustments in a hospital.
7. Describe the key issues associated with managed care and its reimbursement methods. How does managed care impact hospital net revenues?
8. A key aspect of the Patient Protection and Affordable Care Act is rewarding hospitals for strong performance and penalizing them for quality issues, such as high infection rates and high readmission rates to the facility. Explain the details of how PPACA rewards and punishes hospitals for their performance.
9. While the operating budget process is underway in June, the capital budget process must also begin. Describe what should be happening in the capital budget process during June of each year.
10. Explain the difference between top-down and bottom-up budgeting, and give the pros, and cons of each. Based upon your learning here, which approach do your personally favor, and why?