Health care finance essay

Healthcare finance


of the article

Thearticle of Betsy Gallup – Ethics are a Significant Part ofRunning a Health-Care Facility, explains ethics as composed ofthree components: integrity, independence, and objectivity. Patientsin a hospital anticipate receiving fair care from the medicalpractitioners. Billing and coding of patient’s stay in the hospitalalso require ethical standards to be carried out. Independence of theaccounting employees enables them to avoid conflict of interests.Conflicts among the vendors and the healthcare services provided arethe leading causes of increased prices of the services and suppliesto maximize profits. Betsy exemplifies this by how hospitals takeadvantage of patients to utilize some medication in the course ofsurgery, not because of its appropriateness for the patient, butbecause the suppliers of the medication have a monetary inducement inthe utilization of the medication.

Integritycalls upon the medical professionals to uphold honesty. Objectivityand integrity require the accounting employees to avoid conflictinginterests since high costs will make the stakeholders question thereliability of the accounting policies employed. Financial ethics arenormally grounded in the branch of ethics referred to asresponsibility. The healthcare provider should be responsible andgive best services to the organization and their clients. Thehealthcare personnel and the patients find their accountabilityconflicting due to unethical practices like doubling of the medicalbills. This makes the health worker liable, and should be reported tothe relevant authorities.

PeerReviewed Article

Fox,Myers, &amp Pearlman in 2012 made an analysis to describe theperformance of ethical consultations in the US hospitals. Hospitalswere started with the aim of generating a point of reference evidenceto accelerate impending attempts in quality and ethical enhancements.A detailed survey on the strategic informers entailed an unselectivesample of the US hospitals to enable an estimation regarding the thenpresent practices. The questions focused upon included:

  1. How frequently are the Ethics Consultations Services conducted?

  2. Which training and background history is required?

  3. How do the services function?

  4. Is there a relationship between the features of a hospital’s ECS and the instructor’s part, the ownership, bed sizes, and the training history?

Concentrationwas placed on the key research areas through the application of datafrom contributions and consultations from a group of twenty experts.They were obtained from the field of clinical ethics, bioethics,evaluation, and research in healthcare. It was inclusive of sixhundred hospitals representing twelve percent of the standardhospitals by the American Hospital Association information. Data wasobtained indicating the number of the general hospitals in the USthat held Ethics Consultation Training. Of the six hundred hospitalseighty-one percent conducted ECSs, and fourteen percent were in thecourse of its development. Six percent of the hospitals conductedmore than one of the Consultation Services with 80% having two. Sixhospitals remained closed in the entire data collection period.

PeerReviewed Article

Zelman,McCue, &amp Glick tell of how the shareholders, creditors, publicand the governmental organizations seek significant information tomake decisions regarding their financial steadiness. An example isthe financing of a health organization whereby, the sponsor getsinterested in the organization’s debt, cash at hand, and theprofits earned as per the financial statements so as to make informeddecisions. A governmental organization seeks to know the quantity ofcharity performed by an organization, or the profits earned by thecare providers. The standard financial data needed call for thegeneration of the following documents each year:

  • The balance sheet

  • The financial performance statement

  • The changes in the owner’s equity statement

  • The cash flows statement

Theiroverall format is the same but they are tailor-made to show theunconventionality of some organizations like healthcare, transport,and manufacturing. The healthcare, for example, entails forms likenon-profit making organizations, governmental agencies, andbusinesses for profits.

Anexplanation and discussion of financial terms as applied in healthcare finance


Itis a financial statement, which puts in summary form the liabilities,assets, and the equity of the shareholders as at some specific time.The divisions indicate the company’s ownership, what it owes, andthe funds invested by the shareholders. Fixed assets comprise ofbuildings, equipment, and furniture (Baker&amp Baker, 2000). Current assets are convertible into cashwithin a year, and they include inventory, accounts receivable, andany expenses prepaid. Current liabilities require payment within oneyear, and they include the expenses accrued, and short-term debt.Long-term liabilities are the loans that require payment for manyyears. The retained earnings and the medical equity signify thevariance between the assets, and liabilities of the entity.


Thisis the net worth of the shareholders. It is entails the funds thatremain in a clinic, hospital or any healthcare entity when they selloff their assets and pay their liabilities. It includes the paid-incapital, the Treasury bills and bonds, capital stock, and thetranslation gains or losses from foreign currencies.


Thisis the income before the interest, taxes, depreciation, andamortization. It is used in the measurement of profitability of thehealthcare entity. It is obtained by adding back amortization anddepreciation to the operating income. It is used in the comparison ofprofitability of health care entities in the industry as iteradicates the effect of accounting and financing resolutions.


Theseare the earnings before interest, taxes, depreciation, amortization,and marketing. It is used in the assessment of healthcare entitieswith insignificant amounts of cash flow as a result of poor revenueavenue.


Thisis the protection of the financial wellbeing of the clients byconducting high levels of transparency, and accountability whendealing with the funds of the shareholders and patients in hospitalsand clinics (Spencer,2013).It entails correct billing and referring patients for services, whichare necessary about their ailments.


Itis the process of dealing with the analysis of finances, assembling,and conducting an evaluation of the outcomes (Cleverley,2011).It measures the productivity and efficiency of a healthcare serviceproviding organization in comparison to other competitors in thefield. It is used in the strategic management of an organization.

Financialtrend analysis

Trendanalysis is based on the fact that, the performance of a share in thepast indicates the same movement in the future. There are long-term,intermediate, and short-term trends.


Itis the quantitative analysis of information in an entity’sfinancial statements. Ratios from the present year are compared tothose of past years, a whole sector, or another business to evaluatean organization’s performance. They include earnings per share,debt-equity ratio, and asset turnover ratios.


Baker,J. &amp Baker, R. (2000).&nbspHealthcare finance.Gaithersburg, Md.: Aspen.

Fox,E., Myers, S., &amp Pearlman, R. (2007). Ethics Consultation inUnited States Hospitals: A National Survey.&nbspTheAmerican Journal Of Bioethics,&nbsp7(2),13-25.

Zelman,W., McCue, M., &amp Glick, N. (2014).&nbspFinancial managementof health cares

organizations.San Francisco: Jossey-Bass.

Cleverley,W. (2011).&nbspEssentialsof health care finance.Gaithersburg, Md.: Aspen Publishers.

Spencer,E. (2013).&nbspOrganizationethics in health care.New York: Oxford University Press.