Gapenski's Fundamentals of Healthcare Finance 3rd Edition by Kristin Reiter
Complete Chapter Solutions Manual are included (Ch 1 to 13) ** Immediate Download ** Swift Response ** All Chapters included ** Cases solutions included 5 /1/17 A
NSWERS TO END -OF-CHAPTER QUESTIONS 1.
1 a. As used in this book, the term healthcare finance relates to the financ e function practiced by health services organizations (healthcare providers) and by organizations that manage health services, such as managed care organizations . b.Healthcare finance consists of two broad areas of specialization. Accounting involves t he
r
ecording and reporting, in financial terms, of an organization’s economic events.
Financial management , also known as corporate finance, provides the theory, concepts,
and tools necessary to help managers make better financial decisions. In practi ce, the
boun
dary between accounting and financial management is blurred because som e
as
pects of accounting involve decision making and many financial management
applications require accounting data.
c.While all industries have some individual characteristics, the health services industry is truly
unique, and hence students planning to work in that industry can better understanding th e
ap
plication of finance by using a book that incorporates the unique features of the industry.
The three primary sources of uniqueness are the large number of not-for-profit
or
ganizations , the third -party payment system , and the extent of government involvement .
1.
2 a. The primary role of finance in health services organizations, as in all businesses, is to plan for, acquire, and utilize financial resources in such a way as to maximize the efficiency and value of the enterprise. In general, finance activities include planning and budgeting, financial reporting, long- term investment decisions, financing decisions, wor king capital management, contract management, and financial risk management. b.When most healthcare providers were reimbursed on the basis of costs incurred, the role of
finance was minimal. At that time, the most critical finance function was cos t accounti ng
bec
ause it was more important to account for costs than it was to control them. Today,
however, healthcare providers are facing an increasingly competitive environment, and any
business that ignores the finance function runs the risk of financ ial deterioration, whic h
ul
timately could lead to bankruptcy and closure, and hence failure to achieve its mission .
1.
3 a. Here is a brief discussion of the most important health services settings: H
ospitals: Hospitals traditionally provide diagnostic and therapeutic services to individuals requiring more than several hours of care, although most hospitals are actively engaged in ambulatory services, including emergency services. Hospitals differ in function, length of patient stay, size, and ownership . General acute care hospitals , which provide general medical and surgical services and selected specialty services, are short stay (generally less than 30 days) facilities that account for the majority of hospitals. Specialty hospitals , such as psychiatric, children’s, women’s, rehabilitation, and cancer hospitals, limit admission of patients to specific ages, sexes, illnesses, or conditions. Hospitals are organized as private not-for-profit, investor -owned, public (nonfederal), and federal entities. Feder al hospitals , such as those administered by the military services or the Department of Veterans Affairs , serve special purposes . Public hospitals are primarily (or wholly) funded by a city, county, tax district, or state. Private, not -for-profit hospitals are nongovernment entities organized for the sole purpose of providing healthcare services. Finally, investor -owned hospitals are for-profit entities owned by their stockholders. Ambulatory care: Ambulatory care , also known as outpatient care, encompasses services provided to noninstitutionalized patients in a healthcare facility (as opposed to at home). Traditional outpatient settings include medical (physician) practices, hospital outpatient departments, and emergency departments . In recent years , there has been substantial growth in nontraditional ambulatory care settings , such as ambulatory surgery centers, urgent care centers, diagnostic imaging centers, rehabilitation/sports medicine centers, and clinical laboratories. In general, the new settings offer patients greater amenities and convenience (atmosphere, parking, scheduling, waiting times, and privacy) than hospital -based services offer and, in many situations, provide services at a lower cost than hospitals do. Home health car e: Home health care brings many of the same services provided in ambulatory care settings to the patient’s home. In addition to meeting purely medical needs, such as infusion therapy, ventilator care, pregnancy monitoring, and pain management, home health care often involves assistance with activities of daily living, such as eating, bathing, and locomotion. Long- term care: Long- term care, which entails healthcare services that must be provided over an extended period, includes inpatient, outpatient, and home health care s ervices, often with a focus on mental health, rehabilitation, and nursing home care. Although the use of long- term care services is greatest among the elderly, these services are used by individuals of all ages. Individuals become candidates for long- term care when they become too mentally or physically incapacitated to perform tasks necessary to function in their environment and their family members are unable to perform those tasks . Long- term care is a hybrid of health services and social services, but perhaps the most prominent setting for such care is the nursing home . Three levels of nursing home care exist: (1) skilled nursing facilities, (2) intermediate care facilities, and (3) residential care facilities. Skilled nursing facilities (SNFs) provide the level of care closest to hospital care. Services must be under the supervision of a physician and must include 24- hour daily nursing care. Intermediate care facilities (ICFs) are intended for individuals who do not require hospital or SNF care but whose mental or physical condition requires daily continuity of one or more medical services. Residential care facilities are sheltered environments that do not provide professional healthcare services, and thus most health insurance programs, including Medicare and Medicaid, do not provide coverage for residential care. Integrated delivery system s: Hospitals and physicians sometimes combine resources to create new organizations that, instead of providing a single healthcare service, provide a coordinated continuum of services. Although these organizations can be structured in different ways, they all fall under the broad category of integrated delivery systems . The defining characteristic of an integrated delivery system is that a provider organization assumes full clinical and, in some cases, financial responsibility for the healthcare needs of the members of a managed care plan or the employees of a major company or government unit. b. The hypothesized benefits of providing hospital care, ambulatory care, long- term care, and other healthcare services through an integrated delivery system include the following: 1. Patients are kept in the organizational network of services ( patient capture). 2. Providers have access to managerial and functional specialists. 3. Fully integrated information systems can be developed more easily. 4. Larger, more diversified organizations have better access to capital. 5. The ability to recruit and retain management and professional staff is enhanced. 6. Integrated delivery systems are able to offer insurers a complete package of services. 7. Incentives can be created that encourage all providers to work for the common good. Unfortunately, achieving these benefits in practice has proven to be difficult.
