Hcs 405 Healthcare Financial Accouting

Topics: Finance lease, Finance, Investment Pages: 4 (1194 words) Published: August 24, 2013
Health Care Financial Accounting
January 28, 2013
Diana Schilling

Health Care Financial Accounting
In the United States, organizations are financially accessible because of many years of financing cuts, reductions in Medicare payments imposed by Balanced Act of 1997, decreases in Medicaid reimbursements, and the lowering stresses of controlled care (University of Phoenix, 2013). Organizations and other health care facilities should organize cautiously when the situation comes to financing choices, service agreements, type of equipment, physician favorites, and locating to assist in making the best decisions. According to several published and quoted surveys, organizations are postponing or eliminating equipment investments in short-term (Barlow, 2009). Leasing is a substitution to another means of financing. When an organization is deciding when to lease or purchase, the team will decide by how much cash they own from their current funds. If the organization does not have the funds to purchase equipment, then the organization will borrow money to purchase the equipment. Service agreements are contracts to examine or repair the equipment and can be made part of a lease settlement. Whether the equipment is leased or bought, a service agreement will be indicated as an expense and does not need to be used for comparison between leasing and purchasing (Baker & Baker, 2011). Elijah Heart Center is a 120,000 square foot hospital to manage, and function as a coronary care unit for up to 140-beds in New York. The finance department has reported that Elijah Heart Center is facing a potential working capital shortfall because of discounts given to manage care companies, decreased in Medicare reimbursements, increase in present liabilities, unused equipment placed in patient’s room, and obtain the workflow of contract nurses. Elijah Heart Center will receive 2,300,000 from Medicare and other administered care organizations within three months but is...

References: Baker, J.J., & Baker, R.W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Jones & Bartlett.
Barlow, R. (2009). Effective equipment planning begins in the 'basement. '. Healthcare Purchasing News, 33(9), 50-52.
University of Phoenix. (2013). Analyzing Financial Indicators for Decision Making [Multimedia]. Retrieved from University of Phoenix, HCS 405 - Health Care Financial Accounting website.
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