List of Tables, Figures, and Exhibits | |

Preface | |

TheAuthors | |

Acknowledgments | |

The Context Of Health Care Financial Management | |

Introduction | |

Rising Health Care Costs | |

The Payment System | |

Technology 6 | |

The Aging Population | |

Prescription Drug Costs and Medicare Part D | |

Chronic Diseases | |

Compliance and Litigation | |

The Uninsured | |

Efforts to Control Costs | |

Efforts by Payors to Control Health Care Costs | |

DRGs | |

Capitation | |

Global Payments | |

APCs | |

Pay-for-Performance | |

Cutting Delivery Costs | |

Shift to Outpatient Services | |

Cost Accounting Systems | |

Information Services Technology | |

Mergers and Acquisitions | |

Reengineering/Redesign | |

Alternative Forms of Care | |

Retail Health Care | |

Medical Tourism | |

Medical Home | |

Cost Control Issues with Ethical Overtones | |

Summary | |

Key Terms | |

Questions and Problems | |

Health Care Financial Statements | |

Introduction | |

The Balance Sheet | |

Assets | |

Current Assets | |

Noncurrent Assets | |

Liabilities | |

Current Liabilities | |

Noncurrent Liabilities | |

Net Assets | |

Stockholders' Equity | |

Notes to Financial Statements | |

The Statement of Operations | |

Unrestricted Revenues, Gains, and Other Support | |

Net Patient Service Revenues | |

Premium Revenues | |

Other Revenues | |

Net Assets Released from Restriction | |

Expenses | |

Depreciation and Amortization | |

Interest | |

Provision for Bad Debts | |

Other Expenses | |

Operating Income | |

Other Income | |

Excess of Revenues over Expenses | |

Below the Line Items | |

Change in Net Unrealized Gains and Losses on Other | |

than Trading Securities | |

Increases in Long-Lived Unrestricted Net Assets | |

Transfers to Parent | |

Extraordinary Items | |

Increase in Unrestricted Net Assets | |

The Statement of Changes in Net Assets | |

Changes in Unrestricted Net Assets | |

Changes in Temporarily Restricted Net Assets | |

Changes in Permanently Restricted Net Assets | |

The Statement of Cash Flows | |

Cash Flows from Operating Activities | |

Cash Flows from Investing Activities | |

Cash Flows from Financing Activities | |

Cash and Cash Equivalents at the End of the Year | |

Summary | |

Key Terms | |

Key Equations | |

Questions and Problems | |

Financial Statements for Sample Not-for-Profi t Hospital and For-Profi t Hospital and Notes to Financial Statement | |

Principles And Practices Of Health Care Accounting | |

Introduction | |

The Books | |

Cash and Accrual Bases of Accounting | |

Cash Basis of Accounting | |

Accrual Basis of Accounting | |

An Example of the Effects of Cash Flows on Profit | |

Reporting Under Cash and Accrual Accounting | |

Recording Transactions | |

Rules for Recording Transactions | |

The Recording Process | |

Developing the Financial Statements | |

The Balance Sheet | |

Assets | |

Liabilities | |

Net Assets | |

The Statement of Operations | |

Unrestricted Revenues, Gains, and Other Support | |

Operating Expenses | |

Operating Income and Excess of Revenues over Expenses | |

Increase in Unrestricted Net Assets | |

Statement of Changes in Net Assets | |

Statement of Cash Flows | |

Summary | |

Key Terms | |

Questions and Problems | |

Financial Statement Analysis | |

Introduction | |

Horizontal Analysis | |

Trend Analysis | |

Vertical (Common-Size) Analysis | |

Ratio Analysis | |

Categories of Ratios | |

Key Points to Consider When Using and Interpreting Ratios | |

Liquidity Ratios | |

Current Ratio | |

Quick Ratio | |

Acid-Test Ratio | |

Days in Accounts Receivable | |

Days Cash on Hand | |

Average Payment Period | |

Liquidity Summary | |

Revenue, Expense, and Profi tability Ratios | |

Operating Revenue per Adjusted Discharge | |

Operating Expense per Adjusted Discharge | |

Salary and Benefi t Expense as a Percentage of Total Operating Expense | |

Operating Margin | |

Nonoperating-Revenue Ratio | |

Return on Total Assets | |

Return on Net Assets | |

Revenue, Expense, and Profitability Summary | |

Activity Ratios | |

Total Asset Turnover | |

Fixed Asset Turnover | |

Age-of-Plant Ratio | |

Activity Summary | |

Capital Structure Ratios | |

Long-Term Debt to Net Assets | |

Net Assets to Total Assets | |

Times Interest Earned | |

Debt Service Coverage | |

Capital Structure Summary | |

Summary of Newport Hospital's Ratios | |

Summary | |

Key Terms | |

Key Equations | |

Questions and Problems | |

Working Capital Management | |

Introduction | |

The Working Capital Cycle | |

Working Capital Management Strategies | |

Asset Mix Strategy | |

Financing Mix Strategy | |

Cash Management | |

Sources of Temporary Cash | |

Bank Loans | |

Lines of Credit | |

Commitment Fees | |

Compensating Balance | |

Transaction Notes | |

Trade Credit or Payables | |

Revenue Cycle Management | |

Scheduling or Preregistration | |

Registration | |

Charge Capture | |

Coding | |

Billing | |

Payment | |

Collecting Cash Payments | |

Decentralized Collection Centers and Concentration Banking | |

Lockboxes | |

Wire Transfers | |

Investing Cash on a Short-Term Basis | |

Treasury Bills (T-bills) | |

Negotiable Certifi cates of Deposit | |

Commercial Paper | |

Money Market Mutual Funds | |

Forecasting Cash Surpluses and Defi cits-The Cash Budget | |

Cash Inflows | |

Cash Outflows | |

Ending Cash Balance | |

Accounts Receivable Management | |

Methods to Monitor Accounts Receivable | |

Methods to Finance Accounts Receivable | |

Factoring | |

Pledging Receivables as Collateral | |

Methods to Monitor Revenue Cycle Performance | |

Laws and Regulation for Billing Compliance | |

Health Insurance Portability and Accountability Act | |

Summary | |

Key Terms | |

Key Equations | |

Questions and Problems | |

The Time Value Of Money | |

Introduction | |

Future Value of a Dollar Invested Today | |

Using a Formula to Calculate Future Value | |

Using Tables to Compute Future Value | |

Using a Spreadsheet to Calculate Future Value | |

Present Value of an Amount to Be Received in the Future | |

Using a Formula to Calculate Present Value | |

Using Tables to Compute Present Value | |

Using a Spreadsheet to Calculate Present Value | |

Annuities | |

Future Value of an Ordinary Annuity | |

Using Tables to Calculate the Future Value of an Ordinary Annuity | |

Using a Spreadsheet to Calculate the Future Value of an Ordinary Annuity | |

Future Value of an Annuity Due | |

Present Value of an Ordinary Annuity | |

Using Tables to Calculate the Present Value of an ordinary Annuity | |

Using a Spreadsheet to Calculate the Present Value | |

Present Value of an Annuity Due | |

Special Situations to Calculate Future or Present Value and Other Excel Functions | |

What If the Interest Rate Is Not Expressed as an Annual Rate? | |

How to Compute Periodic Loan Payments Using Excel | |

How to Calculate the Compounded Growth Rate | |

How to Calculate the Present Value of Perpetual Annuities | |

How to Solve for the Interest Rate of a Loan with Fixed | |

Loan Payments | |

Summary | |

Key Terms | |

Key Formulas | |

Questions and Problems | |

Future and Present Value Tables | |

The Investment Decision | |

Introduction | |

Objectives of Capital Investment Analysis | |

Nonfinancial Benefits | |

Financial Returns | |

Ability to Attract Funds in the Future | |

Analytic Methods | |

Payback Method | |

Analysis | |

Strengths and Weaknesses of the Payback Method | |

Net Present Value | |

Using the Small Hospital as an Example of Net Present Value Analysis | |

Decision Rules Regarding NPV | |

Using Spreadsheets to Calculate NPV | |

Strengths and Weaknesses of the NPV Method | |

Internal Rate of Return | |

Equal Cash Flows | |

Unequal Cash Flows | |

Decision Rules with IRR | |

Strengths and Weaknesses of IRR Analysis | |

Using an NPV Analysis for a Replacement Decision | |

Illustrative Example | |

Solution | |

Summary | |

Key Terms | |

Key Equations | |

Questions and Problems | |

Technical Concerns Regarding Net Present Value | |

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