Net Worth Terminology in the Heath Care Industry
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Introduction
The purpose of finance in the healthcare industry is to indicate the elements of investment in healthcare and how the two fit together. It is important to note that the healthcare industry regarded as a service industry; therefore, the industry does not belong to the manufacturing business. The sector has inventories that supply medical products together with drugs, but the stocks do not belong to the manufacturing business but the service delivery. Both of the articles have continued to explain the significant viewpoints from the healthcare managers, which include the financial view. In this view, we get to understand that healthcare managers work daily to try to understand the finances in the organization through strategic planning performances within the organization. The process view is also a significant point where managers work together with the organization system by gathering an accumulation of data in the organization. Finally, the clinical observation indicates that the managers are responsible for service delivery, especially as they interact directly with their patients.
There are two financial terms, accounting and commercial type, whereby the accounting type is considered either for a third party or the outside. Therefore the financial accounting deals with the economic reports from the outside. The third parties in the health care industry in consideration of the external reporting include entities from the government such as Medicaid, and Medicare, among others (Baker, 2017). Moreover, the organization in proprietary creates reports to present to the stockholders, and the taxpayers in the district hospital. Therefore it is essential for the financial statements that have purposes that involve the third party is in alignment with the principles from the accounting transactions and measures. Generally, one can conclude that the financial reporting transactions have already occurred, making the sales retrospective.
The other type of accounting is the managerial accounting which deals with the internal transactions. The reports that concern the profit services, together with the services that include the services that are concerned with pricing is common in the managerial account. Therefore the strategy planning together with both the decisions made on long-term and intermediate both represent the administrative account usage. Just like the financial account, managerial accounting also deals with occurred transactions together with future purchases, therefore the managerial statement prepared through outcome projections and budget planning (Baker, 2017). Thus both the prospective and retrospective sales are found in managerial accounting.
The essential health care terminologies include the chart of accounts; this element outlines the company’s organization. The table has account titles given in numeric coding. The map of reports is designed to put together all the financial data in the health care organization in a uniform manner. Abandonment is a term used to indicate a complete retirement of an asset considered fixed from the healthcare service, followed by salvage from the removal of reclaimed parts. An Accelerated depreciation shows the cost deemed to be excessive, and with skilled labor provided is limited. Also, an adjusted case-mix value unit (ACMVU) indicating the admissions in the hospital, admission in chemical dependency, and adjusted birth for nurses. The bed turnover rate is a term used to indicate the number of times the facility bed in the health care industry by which occupants changed in a certain period. Betterment, a term used to explain the expenditure used in a fixed asset through an average rate of an output used during the operating costs that are considered low.
The health care industry can be considered as a corporation since it is a legal entity that provides services through conducting the healthcare business in various organizations. The health care industry is an entity that has separated the founders of the organizations, with the workers of the healthcare industry (Garrison Jr, 2018). The health care industry should be responsible for paying its taxes and be held legally liable if an illegal incident occurs in the organization. The health care industry can make a profit, and the main benefit of the organization’s status considered corporate is personal liability avoidance. Therefore a health care industry considered to be integration, and aggregation in economic sectors, with a variety of services that support the corporate wellness of individuals who have sought medical help in the health care facilities and benefit in the management of the pharmacy sector.
As an author, it is essential to be more specific and detailed to provide accurately. Substantial information to either those in the medical department, the economist, financial managers, among others (Garrison Jr, 2018). These individuals need to be aware of the importance of finance in the health care industry. Therefore, they need information that is well researched, prepared, and presented to gather more information. However, both of the individuals in the medical and financial field also need to be careful about what information they receive from different articles. The information they collect needs to be appropriate and up to date to avoid misinterpretation and confusion from the various reports and data.
References
Baker, J. J., Baker, R. W., & Dworkin, N. R. (2017). Health care finance. Jones & Bartlett Learning.
Garrison Jr, L. P., Pauly, M. V., Willke, R. J., & Neumann, P. J. (2018). An overview of the value, perspective, and decision context—a health economics approach: an ISPOR Special Task Force report [2]. Value in Health, 21(2), 124-130. (https://www.sciencedirect.com/science/article/pii/S1098301517338913