Financial Environment

Topics: Non-profit organization, Non-governmental organization, Voluntary association Pages: 4 (964 words) Published: March 30, 2014
Financial Environments
Megan Kilkenny
January 20, 2014
Crystal Chilman

Financial Environments

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 Services", 2013).

There are several different types of health care organizations that offer medical services to patients. Because of the many different services and organizations in healthcare, the financial aspect of health care is not so cut and dry. Health care organizations can be described as either for-profit, not-for-profit, or part of a government organization. Some examples of these health care organizations are hospitals, nursing homes, health insurance companies, and home health care agencies. Gapenski (2008) explains that he healthcare field is different from any other field mainly because of two factors. Unlike other types of services, most healthcare providers and organizations are structured as not-for-profit rather than being owned by an investor. Another major factor that contributes to its uniqueness is the fact that payment is made by a third party rather than the individual who receives the services.

For-profit Organizations
The Watermark at Logan Square, Tenet Healthcare, and Hospital Management Associates (HMA) are just three examples of for-profit health care organizations in today's market. These are investor owned organizations that must pay taxes and do not receive the same benefits that...

References: Berger, S. (2008). Fundamentals of health care financial management. A practical guide to fiscal issues and activities. John Wiley & Sons.
Centers for Medicare & Medicaid services. (2013). Retrieved from
Ebrahim, A. (2010). Nonprofit agency challenges. Journal Of Policy Analysis & Management, 29(3), 628-632.
Gapenski, L. C. (2008) Healthcare finance: An introduction to accounting and financial management. (4th ed.). Chicago, IL: Association of University Programs in Health Administration.
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