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Financial management of a HCO

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For many health care organizations maximization of profit may not be a goal at all, although at least some profit is necessary to ensure the financial well-being of even these organizations. What are two overriding goals of financial management?

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Overriding Goals
For many health care organizations maximization of profit may not be a goal at all, although at least some profit is necessary to ensure the financial well-being of even these organizations. What are two overriding goals of financial management?

The two overriding goals of financial management are profitability and viability. (1)

Health care organization do not put profitability as their goal, but even these organization must generate some sort of profit in order to achieve other goals. (1) Health care organization need profits so that they can ...

Solution Summary

Health care organization do not put profitability as their goal, but even these organization must generate some sort of profit in order to achieve other goals. (1) Health care organization need profits so that they can expand other services and offer a wider access to health care. They need to earn profits on patients so that they can cover the costs for their high-quality services.

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See Also This Related BrainMass Solution

Healthcare Organizations and inventory control

"Once you identify your physical inventory status, a popular idea used in business to help evaluate your inventory control process is the inventory turnover rate (or ratio) - a topic discussed earlier in McLean in the financial statement analysis chapter. In general business, the inventory turnover ratio is defined as sales divided by inventories, and companies can compare their calculated ratios with industry averages. The questions evaluate this issue in more detail as it pertains to Healthcare Organizations."

In your response please reference the attached chapter from McLean, Robert A. (2003). Financial Management in Health Care Organizations (2nd ed.). Albany, NY: Delmar Publishers.

In practical terms, how would you determine the inventory turnover rate for a HCO which focuses on patient care? How would you use this rate to help manage such a HCO's inventory levels? What are the key problems and issues involved in calculating and using the inventory turnover rate in HCOs?

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