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Financial Environment In Health Care

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Financial Environment In Health Care
Financial Environments
Megan Kilkenny
HCS/577
January 20, 2014
Crystal Chilman

Financial Environments Introduction

With recent big changes in healthcare legislation, health care organizations are moving towards a system that changes reimbursement procedures. Health care organizations will be reimbursed by the government based on the quality of care provided by that organization. The Affordable Care Act (ACA) requires certain steps to make Medicare more resourceful by decreasing the amount of overpaid funds to insurance companies, adjusting reimbursement rates to levels that are more suitable, and altering payment scales and systems to support the delivery of efficient, premium health care ("Centers For Medicare & Medicaid …show more content…
These are investor owned organizations that must pay taxes and do not receive the same benefits that not-for-profit organizations receive. For-profit healthcare organizations are owned by investors. In terms, this means they have shareholders who benefit directly from any profits that are generated from this organization. Unlike, not-for-profit organizations, these for-profit organizations do not usually have the mission of taking on charity work or …show more content…
Three examples of not-for-profit healthcare organizations include The Hospital of the University of Pennsylvania (HUP), Memorial Sloan-Kettering Cancer Center, and The Cleveland Clinic. Gapenski (2008) explains that not-for-profit organizations must be structured and managed so that they operate exclusively to the interest of the public. Non-profit organizations were formed with the purpose of servicing the needs of the less fortunate. This later led to non-for-profit hospitals being free from paying taxes because of the fact that they were providing certain social services. Due to the fact that individuals can not benefit from the profits of not-for-profit organizations, dividends from these organizations cannot be paid (Gapenski, 2008). Not-for-profit organizations are also controlled by a board of trustees, which often times makes it hard to make certain changes or decisions without everyone in
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