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Financial Data

1) Which statement was more financially helpful? How has this benchmark helped you? How will you use it to plan for the future?

• My organization spends $15 billion on emergency room visits per year.

• My organization spends $3 billion less than a comparable organization on emergency room visits, and they spend $18 billion!

2) Payment systems for health care are more complex than for other industries. What contributes to the complexity? How did this complexity come to be?

3) What revenue trends affect the health care industry? How are different types of health care entities affected by economic hardships? Provide examples.

*Provide two references for each question

Solution Preview

Healthcare Financial Data

1) Which statement was more financially helpful? How has this benchmark helped you? How will you use it to plan for the future?

• My organization spends $15 billion on emergency room visits per year.

• My organization spends $3 billion less than a comparable organization on emergency room visits, and they spend $18 billion!

These statements have to do with conducting financial ratio analysis which combines values from financial statements to create single numbers that have easily interpretable economic significance and can facilitate comparisons. A single ratio has little meaning and it proves to be more helpful to have another ratio to compare with (i.e.: what you may want to summarize in answering which statement was more helpful.) (Gapenski, 2009).

By using "My organization spends $3 billion less than a comparable organization on emergency room visits, and they spend $18 billion" verses the other statement, we can start to conduct comparisons between two healthcare entities of the same scale and thus have a little better idea of a benchmark (process of analyzing key performance indicators through comparisons of like data). You can use benchmarks to predict future financial ratios to some extent depending on the changes in the market and consumer activity. Benchmarks will help a healthcare entity plan for the future in developing a budget and making room for adjustments and gross charges a healthcare entity may face ( Gapenski, 2009).

2) ...

Solution Summary

The expert determines which statement was more financially helpful. The payment systems for health care are given.

$2.19