In this thoroughly revised and updated third edition of Fundamentals of Health Care Financial Management, consultant and educator Steven Berger offers a practical step-by-step approach to understanding the fundamental theories and relationships guiding financial decisions in health care organization.

Set in a fictional mid-sized hospital, the book is written in diary form, taking the reader into the inner workings of the finance executives office. This introduction to the most-used tools and techniques of health care financial management includes health care accounting and financial statements; managing cash, billings and collections; making major capital investments; determining cost and using cost information in decision-making; budgeting and performance measurement; and pricing. As in the previous editions, this book introduces key practical concepts in fundamental areas of financial management.

Table of Contents

Tables, Figures, and Exhibits

Preface

Acknowledgments

The Author

CHAPTER ONE: JANUARY

What Is Health Care?

What Is Management?

What Is Financial Management?

Why Is Financial Management Important?

Ridgeland Heights Medical Center: The Primary Statistics

Pro Forma Development

Living with the Finance Committee and Board of Directors Calendar

Year-End Closing

CHAPTER TWO: FEBRUARY

Accounting Principles and Practices

Objectives of Financial Reporting

Basic Accounting Concepts

Basic Financial Statements of a Health Care Organization

Uses of Financial Information

The Financial Statements

Preparing for the Auditors

Analysis of Sensitive Accounts

February Finance Committee Special Reports

CHAPTER THREE: MARCH

Strategic Financial Planning: Five-Year Projections

RHMC Strategic Financial Planning

Ratio Analysis

The Capital Plan and Its Relationship to the Strategic Plan

CHAPTER FOUR: APRIL

Medicare and Medicaid Net Revenue Concepts

Calculation of Medicare and Medicaid Contractual Adjustments

Implications of the Balanced Budget Act of 1997

Implication of the Medicare Modernization Act of 2003

Managed Care Net Revenue Concepts

Preparation of the Medicare and Medicaid Cost Report

Ratio of Costs to Charges

Presentation of the Audited Financial Statements to the Finance Committee

CHAPTER FIVE: MAY

Fundamentals of Revenue Cycle Management

Patient Registration: To Which Division Should It Report?

Calculation of the Allowance for Doubtful Accounts and Bad-Debt Expense

Calculation of the Allowance for Contractual Adjustments

CHAPTER SIX: JUNE

Budget Preparation: The Beginning

Budget Calendar

Volume Issues

Capital Budgeting: June

Accounting and Finance Department Responsibilities

June Finance Committee Special Agenda Items

CHAPTER SEVEN: JULY

Budget Preparation: The Middle Months

Capital Budgeting: July

Regulatory and Legal Environment

Other Regulatory and Business Compliance Issues

Corporate Compliance

Accreditation Issues

Patient Satisfaction Issues

CHAPTER EIGHT: AUGUST

Capital Budget: August

Operating Budget

Budget Variance Analysis

Budget Variance Parameters

Flexible Budgeting

Cost Accounting and Analysis

August Finance Committee Special Agenda Items

CHAPTER NINE: SEPTEMBER

Operating Budget

Capital Budget: September

Cash Budget

Physician Practice Management Issues

CHAPTER TEN: OCTOBER

Information Systems Implications for Health Care Financial Management

Information Technology Strategic Plan Initiatives

HIPAA Implementation Issues

Selection of a New Health Care Information System

Budget Presentation to the Board Finance Committee

October Finance Committee Special Agenda Items

CHAPTER ELEVEN: NOVEMBER

Preparation of the Budget Results and Delivery to the Department Managers

Budgeting and Spreading Contractual Adjustments by Department

Issues Involving RHMCs Cost Structure

How to Improve the Organizations Cost Structure

Supply Chain Management in Health Care

Benefi ts of Tax Status for Health Care Organizations

Preparation and Implications of the Annual IRS 990 Report

CHAPTER TWELVE: DECEMBER

Getting Ready for Year-End ReportingAgain

Open-Heart Surgery Pro Forma

December Finance Committee Special Agenda Items

Looking into the Future of Health Care Finance

References

Index

The Author

Steven Berger is the founder and president of Healthcare Insights, LLC, which specializes in the teaching of health care general and financial management issues. Healthcare Insights has also created INSIGHTS, the health care industry's best practice decision support software. With more than thirty years experience in the field, he presents health care finance and general management seminars throughout the United States and Canada. He is the author of numerous books and articles on the topic of health care finances.