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Health Care Accounting
Because health care focuses on a human concern, it is especially important to maintain a sense of ethics in this field. This becomes even more important when the concern is finance, accounting, and accountability. It is vital that accountability be maintained in healthcare funds, since the concern is often public funds and its application. If these are badly managed or unethically applied, the cost might be more than financial. Indeed, human lives might be at stake. For this reason, cost principles and generally accepted accounting principles can be applied when considering finance in the healthcare field. In a practical sense, two articles have been chosen to demonstrate accounting principles in a practical sense, the first of which concerns a single-player healthcare financing system, while the second focuses on pharmaceutical companies and their role in financing drug trials.
In the accounting field, there are four main important principles that must be taken into account in terms of the ethical management of funding, of which the first is the cost principle. This principle dictates that the actual cost of assets should be recorded rather than their market value or their estimate in terms of inflation adjustment. The actual cost of assets would then create a more accurate recording of inventory and other purchases in the accounting ledger. In other words,...
According to this principle, revenue should be recorded at the time of earning rather than at the time when payment is received. Such recording will prevent accounting errors as a result of delayed payments.
Third, the matching principle states that expenses and revenue should be matched. Expenses are recorded at the time when they make a contribution to revenue, rather than at the time when they are generated. In this way the profitability of goods and services can be evaluated easily. It also creates a clear connection between expense and income, matching goods and services directly with the revenue that they bring in. Expenses such as administrative costs and employee salaries are recorded as expenses for the current period and cannot be directly linked with revenue.
Finally, the disclosure principle means that all financial information should be released in a clear and comprehensible way. The disclosure should also be balanced against the cost of generating the information and releasing it. Financial statements should be included either in the body of the statements, as footnotes, or in the form of supplemental documents. While the disclosed information should be sufficient to drive corporate and executive decision-making, information that is unnecessary or redundant should be streamlined in such a way as to minimize the cost of disclosure.
Generally accepted accounting principles, also known as GAAP, involves a number of components, of which the first is competence. This means that accounting and financial professionals should not only have a sufficient educational background to perform their work well, but…
References
Hsiao, W.C., Knight, A.G., Kappel, S., and Done, N. (2011). What Other States Can Learn From Vermont's Bold Experiment: Embracing A Single-Payer Health Care Financing System. Health Affairs, Vol. 30, No. 7. Retrieved from: http://hpaa.sph.unc.edu/AdmittedStudents/masters_orient_discuss.pdf
Schott, G., Pachl, H., Limbach, U., Gundert-Remy, U., Lieb, K., and Ludwig, W-D. (2010, Apr.). The Financing of Drug Trials by Pharmaceutical Companies and Its Consequences. Deutches Arzteblatt, Vol. 107, No. 17. Retrieved from: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2872821/
Health Care -- Lean Philosophy on Cost Reduction and Quality Improvement Lean Philosophy is initially traced back to Henry Ford's innovative assembly line, revolutionizing manufacturing while failing to provide true variety. Building on Ford's concepts Toyota management established a Lean Philosophy in the 1930's and 1940's that focused on production flow and waste elimination, resulting in rapid, low cost and high quality processes, along with simpler and more accurate management. These
Health Insurance in the U.S.: Health insurance has become an important part in the modern health care system even before the American government started to discuss the issue of compulsory medical insurance. Actually health insurance has asserted itself through the ever-increasing number of customers seeking for these services as well as through advertisements. The new customers tend to share information on the benefits of health insurance with their friends. This in
097 United States 0.109 0.093808 0.036112 0.068 Utah 0.1071 0.1401 0.035696 0.073 Vermont 0.1326 0.0988 0.040851 0.114 Virgin Islands NA NA NA Virginia 0.1048 0.0829 0.080009 0.092 Washington 0.1229 0.0669 0.027831 0.068 West Virginia 0.1293 0.0774 0.036499 0.055 Wisconsin 0.0954 0.0357 0.032367 0.097 Wyoming 0.1251 0.1453 0.053867 0.075 Notes All spending includes state and federal expenditures. Growth figures reflect increases in benefit payments and disproportionate share hospital payments; growth figures do not include administrative costs, accounting adjustments, or costs for the U.S. Territories. Definitions Federal Fiscal Year: Unless otherwise noted, years preceded by "FY" on statehealthfacts.org refer to the Federal Fiscal Year, which runs from October 1 through September 30. for example, FY 2009 refers to the period
Healthcare Organization and Finance Scenario Medicare covers healthcare services such as surgeries, laboratory testing and doctor visits. It also covers supplies such as walkers and wheelchairs. These services and supplies must be considered as indispensable in the treatment of a certain disease or condition (King, 2009). Therefore, the expenses related to the walker that was prescribed to Mrs. Zwick after her discharge would be fully met in this section of the Medicare. Essentially,
The considerations of that which is physical and that which is fiscal in the work of Sajay (2005) are clearly polar opposites therefore in no way are they comprehensibly compatible but are destined to be at odds with one the other. Summarization The inherent conflict that exists between financial accounting and accounting for performance are separated by a very thin line. That differentiation is because the focus of the business, management,
The idea with this part of the strategy is to be able to form some kind of a partnership with these individuals. This will help to push for a transformation inside the organization. As, these people will help to provide everyone with: a reason for adapting and pushing others to do so (indirectly). (Turner, 1999, pp. 162 -- 163) Once this occurs, you could then have these individuals become a