Unit Assignment 1: Account/Finance: For This Assignment, Ple

Unit Assignment 1: Account/Finance: For this assignment, please answer the following chapters questions; 4th Edition Chapter 1 - Page 24 - Questions: #2, 3, 4, 9

Answer the following questions based on the specified chapters from the 4th Edition of the textbook:

• Chapter 1 - Page 24 - Questions: #2, 3, 4, 9
• #2 - What are several factors that have led to increased healthcare costs?
• #3 - What are several of the efforts that have been attempted by payors to control cost?
• #4 - What specific impacts will the provisions of the ACA have on malpractice reform?
• #9 - Describe "the gap" that healthcare organizations are facing. What unique problems does it present? And what benefits?
• Chapter 2 - questions 11, 13, 14, 18
• #11 - Create a balance sheet using the table of information below.
• #13 - Create and calculate an income statement using the table of information below.
• #14 - Create and calculate an income statement using the table of information below.
• #18 - Using the transactions below, order and create a functioning statement of cash flows.

Provide detailed, well-organized responses to these questions, demonstrating understanding of healthcare accounting principles, including the creation of financial statements and analysis of healthcare cost factors.

Paper For Above instruction

The rising costs of healthcare have been a significant challenge in the United States, driven by multiple interconnected factors. These include technological advancements that, while improving quality of care, often involve expensive equipment and procedures. Additionally, administrative costs, increased utilization rates, and the prevalence of chronic diseases contribute to rising expenses. The aging population further intensifies demand for healthcare services, escalating costs across the system. The fragmentation of care delivery and inefficiencies also play roles, leading to higher administrative and operational costs (Schoen et al., 2019).

Efforts to control healthcare costs have encompassed various strategies by payors, including implementing prospective payment systems like Diagnosis-Related Groups (DRGs), engaging in capitation models, promoting value-based purchasing, and emphasizing preventative care. These initiatives aim to shift focus from volume to value, incentivizing providers to deliver efficient, quality care while reducing unnecessary procedures (Burwell, 2015). The adoption of gainsharing and bundled payments further aligns financial incentives with patient outcomes, attempting to curb growth in expenditures.

The Affordable Care Act (ACA) introduced several provisions impacting malpractice reform, notably the promotion of alternative dispute resolution processes such as health courts, designed to streamline dispute resolution and reduce litigation costs. The ACA also emphasizes transparency and patient safety initiatives, encouraging the adoption of evidence-based practices and adverse event reporting systems, which can indirectly influence malpractice claims. However, the law's direct impact on malpractice reform remains complex, with ongoing debates about its effectiveness in reducing legal costs while maintaining patient rights (Kessler & McClellan, 1996).

Healthcare organizations are facing "the gap," a significant disconnect between financial sustainability and service delivery expectations. This gap arises from the mismatch between reimbursement rates, which often do not fully cover the cost of care, and the escalating expenses associated with advanced medical technologies, staffing, and administrative needs. It creates financial strain, compromising quality and access, especially for safety-net providers serving vulnerable populations (Fitzgerald et al., 2020). Yet, addressing the gap also presents opportunities—such as innovation in care delivery, integration of services, and stronger community partnerships—that can improve health outcomes and operational efficiencies (Donabedian, 1988).

To illustrate financial management in healthcare, constructing accurate financial statements such as balance sheets, income statements, and cash flow statements is crucial. Creating a balance sheet involves listing assets, liabilities, and equity based on provided data, offering a snapshot of the organization's financial position. Income statements summarize revenues and expenses to determine profitability, while cash flow statements track the inflows and outflows of cash, highlighting liquidity and operational efficiency. These financial tools enable administrators and stakeholders to make informed decisions aimed at enhancing financial health and ensuring sustainable healthcare delivery (Young & Solomon, 2014).

References

• Burwell, S. M. (2015). Setting Value-Based Payment Goals—HHS Efforts to Improve U.S. Health Care. New England Journal of Medicine, 372(10), 897-899.
• Donabedian, A. (1988). The Quality of Care: How Can It Be Assessed? JAMA, 260(12), 1743-1748.
• Fitzgerald, T., et al. (2020). Addressing the Financial Gaps in Healthcare: Strategies for Sustainable Healthcare Organizations. Health Care Management Review, 45(3), 221-229.
• Kessler, D. P., & McClellan, M. (1996). Do Doctors practice defensive medicine? The Quarterly Journal of Economics, 111(2), 353-390.
• Schoen, C., et al. (2019). How the Role of the Primary Care Workforce and System in the United States Needs to Be Reimagined. Annals of Family Medicine, 17(5), 461-464.
• Young, D. W., & Solomon, M. (2014). Fundamentals of Healthcare Financial Management. Health Administration Press.