HSM 340 Week 6 and Week 7 discussions (all graded A)

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HSM 340 Week 6 and Week 7 discussions Week 6 Discussion 1 Businesses maintain cash and investments for four primary purposes: 1. Short-term working capital needs 2. Capital investment needs ... 3. Contingencies 4. Supplement operating earnings Uses of cash include • Payments to employees • Payments to suppliers • Payments to lenders for interest and principal • Purchase of fixed assets • Investments Or SOURCES AND USES OF CASH In its most basic form, a cash budget is a statement that projects how the firm’s cash balance position changes between two points in time. Changes to cash position are categorized as either sources of cash flow (sometimes called “receipts”) or uses of cash flow (sometimes called “disbursements”). Sources of cash include • Collection of accounts receivable • Cash sales • Investment income • Sale of assets • Financings • Capital contributions http://devry.vitalsource.com/books/9781449621988/id/ch23lev1sec2 2nd Response List and describe where cash is generated by an organization and where an organization uses its cash. Sources of cash flow and uses or disbursements of cash flow occur when there are changes to the firm cash position. Where cash is generated by an organization and where an organization uses its cash are as follow: SOURCES of cash includes: Collection of accounts receivable, Cash sales, Investment income, Sale of assets, Financings, and Capital contributions Uses of cash include: Payments to employees, Payments to suppliers, Payments to lenders for interest and principal, Purchase of fixed assets, and Investments. In other words organizations generates it cash through cash sales transaction, investment, contract, and so on and it uses its cash through the means of disbursements, expensive, salaries to its employees , bills for utilities and equipment. (Cleverley 508-509) This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:35:10 GMT -05:00 Cleverley, William O., James O. Cleverley, Paula H. Song. Essentials of Health Care Finance, 7th Edition. Jones & Bartlett Learning. <vbk:9781449621988#outline(27.6)>. Week 6 Discussion 2 List and explain the criteria that should be used when investing an organization's cash in the short term. This section lists options that can be used to view responses. Short term investments need to have a high rate of return, such as an interest rate, and need to be able to cashed out quickly. Many times investments have tax penalties and other ramifications that make it difficult to get the cash out when it is needed. When investing a cash surplus, it's only natural to seek the highest rate of return for your investment. Four factors must be considered when making your investment decisions: 1. risk 2. liquidity 3. maturity 4. yield http://www.bizfilings.com/toolkit/sbg/finance/cash-flow/cash-flow-surplusses-for- investment.aspx Or Price Stability- If a firm has a sudden need for cash, most major money-market investments can be sold without any losses. U.S treasury bills are the most credit-worthy money market investments. Money market investments are usually restricted to maturities of less than a year. Safety of Principle-Treasury and federal agency obligations have little risk of loss through default. However, bank securities and corporate obligations may produce a loss through default. Marketability- this is the ability to sell a security quickly and with little price concession before maturity. Maturity- this is the period of time for which a financial instrument remains outstanding or the time period at the end of which the instrument will cease to exist and the principle is repaid with interest. Yield- This is the measure of the investments return. It is affected by all of the above. Another Response List and explain the criteria that should be used when investing an organization's cash in the short term Working capital is very important to the health of any properly working business or healthcare organization as it is the money that is available to you for your day to day operations. Your working capital can be figured out by taking your current assets and subtracting the current liabilities that they company has. It's always good to have a positive working capital because for the most part it is showing that the company is able to pay off those short-term liabilities easily. When you have a negative working capital the company is showing that it can make the payments when they should and that they are collecting receivables slower than they should. I would imagine that every healthcare organization has to make sure that their working capital is increasing as much as it can, when it can. Week 7 Discussion Question 1 This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:35:10 GMT -05:00 Discuss legal and regulatory issues that affect MCOs. Professor Jabbour& Class, Antitrust is a legal and regulatory issue that affects the formation and operation of provider-based managed care organizations. Physicias that do not share risk, assets, and liabilities might be viewed by the government as attemptng to fix prices. Inurnment, Licensure as an Insurer, Incentive payments to physicians to reduce services, and ntentional torts are five legal and regulatory issues that may affect managed care organizations. Cleverley, W.O., Cameron, A.E. (2011). Essentials of Healthcare Finance (7th edition). Jones & artlett arrison, Jr., W.T., Horngren, C.T., Thomas, C.W. (2013). Financial Accounting (9th Edition). earson Education, Inc. Or Antitrust- One cncern with loose affiliations of physicians is the potential for price fixing. If physicians do no share risk, the government may view an IPA arrangement that forms to negotiate prices. Inurnmnt- If a nonprofits entity is involved in the creation of an IDS, it must be careful to ensure that it i not giving away more than it is receiving in value. They must not have its resources used to the bnefit of any individual. Licensure as an Insurer- It is still unclear whether a provider group (IDS) is required to be licensed s an HMO if it accepts payment for service that it does not provide. Incentive Payments- Payments to physicians that provide incentives for fewer services may not be egal if they provide incentives to provide services less than medically necessary. But what is Medically Necessary"? Another Response The most recent law that I can think of with the health industry is the Affordable Care Act, 2010. This Act gears towards small businesses eceive health insurance for their worker, this law is to improve health overage to Americans and protecting existing health insurance policy olders. This law also gives individuals Patient’s Bill of Rights to give the eople constancy and flexibility when they need to make educated choices egarding their health. escribe the relationship between financial planning and strategic planning. his section lists options that can be used to view responses. Strategic planning process is a first step in defining and developing financial policy and financial lanning. Financial planning is fashioned by the definition of programs and services and then assesses the financial feasibility of those programs and services. Both strategic planning and financial planning are the primary responsibility of the board of trustees. This does not exclude top management from the process, because they should be active and participating members of the board. Second, strategic planning should precede financial planning. Third, the board should play an active, not a passive, role in the financial planning process. textbook Or Professor Jabbour& Class, This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:35:10 GMT -05:00 Financial planning is a outlined process that maps out a plan to achieve monetary goals and objectives. This process outlines programs and services and then assesses financial feasibility for these elements. Strategic planning is a statement of the mission or goals that provide guidance to an organization, and are a set of programs/activities that the business will commit resources during the planning period are defined. Cleverley, W.O., Cameron, A.E. (2011). Essentials of Healthcare Finance (7th edition). Jones & Bartlett Harrison, Jr., W.T., Horngren, C.T., Thomas, C.W. (2013). Financial Accounting (9th Edition). Pearson Education, Inc. Another Response Describe the relationship between financial planning and strategic planning. The difference is that strategic planning is a guide or roadmap for the development of a business; this will help diminish inefficiencies and allows a company to increase revenue and decrease their cost. Financial planning is similar to strategic planning, but with financial planning a company can set their objectives and goals through the entire financial life cycle. It is designed for financial allocation and management of capital and finances through investments, budgeting or other expenses. 1. Question : (. 4) When would it make sense to use a flexible budget as compared to a forecast budget? Student Answer: The use of a flexible or a forecast budget has been widely discussed by the people who work in the financial part of the healthcare system. Most firms currently are using forecast of flexible, but we are starting to see a change in this as flexible budgeting is a more sophisticated method of budgeting then what we know as a typical forecast budgeting process. We are seeing more and more healthcare firms go with a flexible budgeting process as they become more experienced in the budgetary process. What a flexible budget does is it adjusts the targeted levels of costs for changes in volume. Lets say that the budget for a nursing unit is operating at 90% occupancy, this is different from the budget for the same unit operating at 75% occupancy. With a forecast budget though, it makes no formal differentiation in the allowed budget between the two levels from the example. This is where the flexible budget would make sense to use over the forecast budget. Another difference is that a flexible budget has to recognize and incorporate underlying cost behavioral patterns. 2. Question : (. 7) Explain the difference between a horizontal merger and a vertical merger. Student Answer: A horizontal merger involves two firms operating in the same kind of business. If the other company sells products similar to yours, your combined sales give you This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:35:10 GMT -05:00 a greater share of the market. If the other company manufactures products complementary to your range, you can now offer a wider range of products to your customers. Vertical mergers involve different stages of production and operations. The main aim of a vertical merger is not to increase revenue, but to improve efficiency or reduce costs. A vertical merger takes place when two companies that previously sold to or bought from each other combine under single ownership. If you want to increase your revenue or widen your product range, go for a horizontal merger. If you want to become more competitive by reducing your costs, or if you need to protect access to vital supplies, you should look into a vertical merger. This study source was downloaded by 100000849840424 from CourseHero.com on 10-06-2022 00:35:10 GMT -05:00 [Show More]

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