Jessica Nelson has an undergraduate degree in psychology from a fine university where the sky is always blue. Because of her interest in doing good deeds and helping society, she is considering a career as a hospital administrator and has been exploring the possibility of obtaining a master in health administration degree from a prestigious university near the beach.
While studying the degree requirements, which were posted online, she noticed that one of the required courses was "Healthcare Accounting". Jessica has never had any business courses, does not know any accounting, and cannot quite understand why a hospital administrator would need to know accounting. She thinks a hospital administrator's efforts should be focused on patient care. You can help Jessica by explaining a number of concepts to her.
What parties are responsible for hiring the top management (e.g., CEO, CFO) of a hospital?
What is a major, regular source of financial information that the parties responsible for hiring a hospital's top management receive at their periodic meetings?
What types of information are contained in financial statements prepared under general accepted accounting principles (GAAP)?
Who are some of the individuals who might want to use the information in the financial statements?
What specific decisions might the individuals y identified in the previous question make based at least partly on GAAP-based financial statements?
How would external reporting of GAAP-based financial statements differ for a non-profit hospital compared to a for-profit hospital?
Name at least two government regulators who would demand financial information from a hospital, either non- profit or for-profit?
A famous quote in healthcare circles is "no margin, no mission.". What does this statement mean, and how does it connect to healthcare accounting?