Finances in Healthcare

Finances in Healthcare

In healthcare, numerous financial terms and complexity of reporting are required such that only the essential information is collected for performance measurement. This ensures perfect monitoring for improvement and adjustment of affected sectors in healthcare. There are several key measurements used by organizations to track financial performance which would be addressed in a discussion with a Chief finance officer (CFO) of a healthcare.

Practicing operating margin is a key financial measurement which would weight physicians at an ascending rate, while practicing net days in accounts received would measure effectiveness and efficiency in revenue collected within a specified period in health care performances. Practicing cash collection percentage would also measure revenue efficiency with total physician compensation percentage being measured from the revenue collected on the physician enterprise. Point of cash collection rate would be considered in reducing the revenue collection expenses while charge lag day would measure the workflow efficiency and identify cash delays. The discussion with CFO would finally indentify ways of slot utilization which would enable production improvement by reviewing percentage of patient schedule occupied (Hurtado et al, 2001).

On protecting investors and contributors from losing trust in how the organization manages the investment they have made, trust and integrity should be made the key principles in the organization. Self esteem enhances when facts are directly addressed while organization leaders maintain collaboration with investors by listening to their suggestions and even asking for their advice. Sharing thoughts, feelings as well as rationale is the key to maintaining trust on healthcare investors and contributors (Hurtado et al, 2001).

Even though operations in healthcare require consistent financial transparency, accounting frauds could occur similar to the one evident in Enron Corporation. Enron reported fraud financial reports which made it appear to be financially stable while it was actually operating at bankrupt level, a case which can apply in healthcares if the Chief Finance Officers fail in their financial monitoring. The Sarbanes-Oxley Act of 2002 was implemented to enforce accuracy of financial information by ensuring severe penalties to fraudulent financial activities. Such legislations should apply in health care since top management has the responsibility of ensuring correct financial statements in their respective fields.


Hurtado, M. P., Swift, E. K., & Corrigan, J. M. (2001). Envisioning the National Health Care Quality Report. Washington, DC: National Academy Press.


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