FINANCIAL STRUCTURE OF A HEALTH CARE ENTITY

Health Care



Financial structure of a health care

Introduction

The primary focus of the paper is going to be on the financial structure of a health care entity from United Kingdom. During the course of this study I will examine the financial structure of a healthcare entity and analyze how the financial structure of a health care entity is different from other normal companies. I will also identify the financial management practices prevailing in the financial environment.

Discussion

I have selected Marshal regional hospital. It is a 20bed hospital with a 120 bed skilled nursing facility. The hospital is located in the rural area of a western state and there is no other hospital within 50 miles. (Steven ,2007)The prevailing economic condition of the area is not that good and in future it's going to get worst as well. Due to the low volume, the operational cost of the hospital is pretty high and therefore the hospital is not progressing.

Financial structure

The hospital is a central provider of health services, but at the same time it's a business as well. Therefore in order to continue its order and make profit as well the hospital requires payment in dollars in order to retain its entity. The hospital receives finances from following resources

Non-patients

Contributors

Miscellaneous

Grants

Tax support

Patients

Self payment

Medicaid

Third party payer

Medicare

Third party payer

Insurance

Other sponsors and companies

The financial policy of the hospital is different for each environment and the hospital charges different amounts from different patients. For instance the amount charged to the patients who are coming through a company or by an insurance firm are charged as per the pre-determined rates between the hospital and the company. (Finkler ,2003)For walk in patients the hospital has a different payment system and the patients are normally asked to pay in advance unlike the patients who are referred by companies are required to prove their identity and bring the receipt or any letter from the company or fax for the payment terms.

Rising Health Care Costs

Many factors have led to rising health care costs, which have increased faster than General inflation user the past decades. Although the average life expectancy of the general population has risen by only approximately three years over this lime period the cost to keep people healthy has approximately doubled. In recent times, medical groups often associate managed care contracting with simply becoming participants in the locale's various health plans, and then either building the group through projected Increases In patient volumes or simply maintaining an existing volume in an effort to keep patients from migrating to another competitor. (Catlin, 2007)Yet, there is an abundance of contractual relationships between payers and providers to facilitate the delivery of health care services in a managed care environment.

Savvy health care financial managers will seek to recognize the complex dynamics and key opportunities associated with each of these economic relationships while building or sustaining a thriving medical practice. As financial managers approach different factual situations, they should critically examine the relationships that exist between and among ...