Health Care Finance

Health Care Finance

Nikki Sinkwitz

University of Phoenix

FIN / HC 571

Al White

September 06, 2010

Health Care Finance

The concepts and principle of finance apply to health care finance because they give you the ability to apply financial principles and concepts to decision making. This is crucial for an organizational group or private practice. You are able to understand the basics of budgeting, managing costs, reporting results and the aspects of accounting for health care organizations. You are able to create budgets to meet your organization’s upcoming needs, understanding costs and know exactly what things cost for your organization and you are able to analyze and mange those cost to help improve the bottom line of your organization. With capital budgeting you learn how to develop long-term plans to support your capital needs and if a certain investment was a good choice.

These concepts and principles allow you to understand the basic definitions of the three major financial statements; the balance sheets, income and cash flow statements. You will understand the basics of generally accepted accounting principles. They help you learn the fundamental tools to evaluate the financial status of your organization such as all the cost management definitions and break-even analysis, finally you learn the basic principles for capital budgeting and a firm understanding of the time value of money. Balance-sheet-based approaches, for example, when used as the sole valuation method, often are inadequate for determining the true financial value of a health care organization. Other methods of practice valuation are available, however, including market, opportunity-cost, and income approaches. Purchasers who clearly understand these various methods can use them to develop a combined approach that effectively quantifies the economic value of a practice and offers advantages during acquisition negotiations (Schwartzben, 1998).

Reference

Schwartzben, D....