What is your current understanding of accounting in the health care industry? How would you describe it to a friend?
How does financial accounting differ from managerial accounting? Which do you think you’ll interact with more in the industry? Explain.
What is a specific example of how you may use financial data or financial statements in your health care career?
- M. discussion #1 reply 100 words
My understanding of accounting in the health care industry involves many different aspects and is being used by many different job titles in a healthcare organization. Accounting is about the finances, record keeping, budget and planning of an organization. This includes the revenue that the organization receives after insurance payments, supply cost, practitioner fees, staffing wages and the cost of day to day running of the business.
I believe as a healthcare manager, that I will be interacting with the managerial accounting aspect more so than the financial accounting aspect. As a healthcare manager, I would utilize managerial accounting as data can be pulled and evaluated at any timeframe for many different purposes such as evaluating staff overtime, premium pay hours, supply utilization cost and analysis of revenue from a referring physician group.
Financial accounting would be used more by outside stakeholders instead of hospital management or C suite execs. The data would be pulled on a more regulated basis, quarterly or annually to be reviewed.
Financial data that I currently use at my organization is about supply and inventory cost, and financials around new capital equipment requests. What type of new procedure are we requesting, how much revenue will it bring in, how much reimbursement will we receive, what type of equipment needs to be purchased, what will be the return on this equipment.
D.F discussion reply#2 100 words
Accounting in health care in basic is the language used in business operations, this primary function is to focus on the cost and balances from supplies to employees. Health care accounting is considered the distribution the authority and the accountability. The accounting is the center of the company that records data and balances finances. They also are responsible for the main financial decisions and influences marketing decisions for a hospital and other health care facilities.
Managerial accounting differs from financial accounting by being more of an internal source. Financial accounting deals with the finances of the business as a whole and is current and requires to follow GAAP, and is prepared for external and more company-wide. Managerial accounting is more internal and more of a forecasted approach, plans, and is more centralized in the internal finances within different areas in the corporation. An example of how you may use financial statements in heath care is by auditing other departments financial data to combine with others as a whole for record keeping and logs.
My understanding of accounting in the healthcare industry involves the management of finances, record keeping, budgeting, and planning within healthcare organizations. It encompasses various aspects such as tracking revenue from insurance payments, calculating supply costs, managing practitioner fees, monitoring staffing wages, and overseeing the overall operational expenses.
Financial accounting focuses on the preparation and reporting of financial statements in accordance with Generally Accepted Accounting Principles (GAAP). It is more externally oriented and provides information to stakeholders outside the organization, such as investors, regulators, and creditors. Financial accounting is typically reviewed on a regular basis, such as quarterly or annually.
On the other hand, managerial accounting is more internally focused and provides information for decision-making within the organization. It involves analyzing data, creating budgets, evaluating costs, and assessing performance. As a healthcare manager, I believe I would interact more with managerial accounting, as it would help me monitor and analyze various aspects of the organization’s operations, such as staff overtime, supply utilization costs, and revenue analysis from different referral sources.
In my healthcare career, I may use financial data or financial statements in various ways. For example, I might use financial statements to evaluate the cost and profitability of new procedures or services, assess the financial impact of acquiring new capital equipment, or analyze the financial performance of different departments within the healthcare organization. Financial data and statements provide valuable insights that aid in making informed decisions and ensuring the financial stability and success of the organization.