of HEALTHCARE FINANCE

Transcription

1 MB of HEALTHCARE FINANCE SECOND ED O N LOUIS C. GAPENSKI GATEWAY!.. TO HEALTHCARE MANAGEMENT AUPHA Health Administration Press, Chicago, Illinois Association of University Programs in Health Administration, Arlington, Virginia

2 Preface XV Purpose of the Book Parti Foundation Concepts i Chapter 1 Introducton to Healthcare Finance 3 Theme Set-Up: Careers in Healthcare Management 3 Learning Objectives / 1.1 Introduction <- 1.2 Defining Healthcare Finance The Role of Finance in Health Services Organizations The Structure of the Finance Department Healthcare Settings, Regulatory and Legal Issues jg 1.7 Current Challenges 2i Theme Wrap-Up: Careers in Healthcare Management 21 Key Concepts 2o End-of-Chapter Questions 24 vii

3 v i i i F u n d a m e n t a l s o f H e a l t h c a r e F i n a n c e Chapter 2 Healthcare Business Basics 26 Theme Set-Up: Business Goals 26 Learning Objectives Introduction Concept of a Business Legal Forms of Businesses Alternative Forms of Ownership Organizational Goals..."..? Tax Laws 43 Theme Wrap-Up: Business Goals 48 Key Concepts 49 End-of-Chapter Questions 51 End-of-Chapter Problems 52 Chapter 3 Paying for Health Services 54 Theme Set-Up: Big Sky's Revenue Sources 54 Learning Objectives Introduction Basic Insurance Concepts Third-Party Payers Managed Care Organizations Alternative Reimbursement Methods The Impact of Reimbursement on Financial Incentives and Risks Medical Coding: The Foundation of Fee-for-Service Reimbursement Healthcare Reform 82 Theme Wrap-Up: Big Sky's Revenue Sources 85 Key Concepts 86 End-of-Chapter Questions 88 Part II Planning, Managing, and Control 89 Chapter 4 Estimating Costs 91 Theme Set-Up: Cost Structure...91 Learning Objectives Introduction The Basics of Managerial Accounting Cost Classification I: Fixed Versus Variable Costs Cost Classification II: Direct Versus Indirect (Overhead) Costs Cost Allocation...102

4 Detailed Contents ix 4.6 Activity-Based Costing 110 Theme Wrap-Up: Cost Structure Key Concepts 114 End-of-Chapter Questions 115 End-of-Chapter Problems 116 Chapter 5 Pricing Decisions and Profit Analysis 120 Theme Set-Up: Profit Analysis Learning Objectives Introduction Healthcare Providers and the Power to Set Prices Price-Setting Strategies Target Costing Profit Analysis Breakeven Analysis Marginal Analysis Profit Analysis in a Capitated Environment The Impact of Cost Structure on Financial Risk s 144 Theme Wrap-Up: Profit Analysis 146 Key Concepts End-of-Chapter Questions 148 End-of-Chapter Problems 149 Chapter 6 Manning and Budgeting 155 Theme Set-Up: Actual Versus Expected Results 155 Learning Objectives Introduction Strategic Planning* Operational Planning Introduction to Budgeting Budgeting Decisions Budget Types Variance Analysis 174 Theme Wrap-Up: Actual Versus Expected Results 181 Key Concepts 182 End-of-Chapter Questions 183 End-of-Chapter Problems 184

5 F u n d a m e n t a l s of H e a l t h c a r e F i n a n c e Chapter 7 Managing Financial Operations 188 Theme Set-Up: Revenue Cycle Management 188 Learning Objectives Introduction The Revenue Cycle and Receivables Management Cash Management Supply Chain Management Monitoring Operations Theme Wrap-Up: Revenue Cycle Management 210 Key Concepts 212 End-of-Chapter Questions 213 End-of-Chapter Problems 214 Part III Financing and Capital Investment Decisions 219 Chapter 8 Business Financing and the Cost of Capital 221 Theme Set-Up: Starting a New Medical Practice 221 Learning Objectives Introduction Setting Interest Rates Debt Financing Debt Contracts Debt Ratings Equity Financing The Choice Between Debt and Equity Financing The Choice Between Long-Term Debt and Short-Term Debt Cost of Capital 243 Theme Wrap-Up: Starting a New Medical Practice 248 Key Concepts 249 End-of-Chapter Questions 251 End-of-Chapter Problems 252 Chapter 9 Capital Investment Decision Basics 254 Theme Set-Up: Evaluating a Project's Financial Merit 254 Learning Objectives Introduction Project Classifications The Role of Financial Analysis in Capital Investment Decisions Overview of Capital Investment Financial Analysis Creating the Time Line Breakeven Analysis 260

6 Detailed Contents xi 9.7 Discounted Cash Flow Analysis Return on Investment Project Scoring The Post-Audit 281 Theme Wrap-Up: Evaluating a Project's Financial Merit 282 Key Concepts 282 End-of-Chapter Questions 284 End-of-Chapter Problems 284 Chapter 10 Project Cash Flow Estimation and Risk Analysis 288 Theme Set-Up: Estimating a Project's Cash Flows and Assessing Risk 288 Learning Objectives Introduction Cash Flow Estimation Estimating the Cash Flows for Bayside's Open MRI Project Risk Analysis Incorporating Risk into the Decision Process An Overview of the Capital Investment Decision Process Capital Rationing! 313 Theme Wrap-Up: Estimating a Project's Cash Flows and Assessing Risk Key Concepts 314 End-of-Chapter Questions 316 End-of-Chapter Problems :317 4 Part IV Reporting Results 321 Chapter 11 Reporting Profits 323 Theme Set-Up: Interpreting an Income Statement 323 Learning Objectives Introduction Financial Accounting Historical Foundation Financial Statement Regulation and Standards Reporting Methods Income Statement Basics Revenues Expenses : Operating Income Nonoperating Income Net Income Net Income Versus Cash Flow 346

7 x i i F u n d a m e n t a l s of H e a l t h c a r e F i n a n c e Income Statements of Investor-Owned Firms A Look Ahead: Financial Condition Analysis 348 Theme Wrap-Up: Interpreting an Income Statement 349 Key Concepts 350 End-of-Chapter Questions 352 End-of-Chapter Problems 352 Chapter 12 Reporting Assets,_Einancing, and Cash Flows 356 Theme Set-Up: Understanding the Balance Sheet and the Statement of Cash Flows 356 Learning Objectives Introduction Balance Sheet Basics Assets Liabilities Equity (Net Assets) Fund Accounting The Statement of Cash Flows.' A Look Ahead: Financial Statement Analysis 380 Theme Wrap-Up: Understanding the Balance Sheet and the Statement of Cash Flows 382 Key Concepts 382 End-of-Chapter Questions. 384 End-of-Chapter Problems 385 Chapter 13 Assessing Financial Condition 389 Theme Set-Up: Techniques for Evaluating Financial Statements 389 Learning Objectives Introduction Financial Statement Analysis Interpreting the Statement of Cash Flows Ratio Analysis Comparative and Trend Analysis Du Pont Analysis Other Analytical Techniques Limitations of Financial Statement Analysis 414 Theme Wrap-Up: Techniques for Evaluating Financial Statements 416 Key Concepts 416 End-of-Chapter Questions 418 End-of-Chapter Problems...419

8 Detailed Contents xiii Glossary 425 Index 441 About the Author 465