Health Care Finance
Helpm31990
9781284118308_SLID_CH02.pptChapter 2:
Four Things the Healthcare Manager Needs to Know About Financial Management Systems
Four Segments That Make a Financial Management System Work
- Original Records—Provide evidence that some event has occurred.
- The Information System—Gathers this evidence.
- The Accounting System—Records the evidence.
- The Reporting System—Produces reports of the effects.
Four Segments That Make a
Financial System Work
- The healthcare manager needs to know that these separate elements exist and that they work together for an end result.
Structure of the Information System
- Identify the inputs
- Identify the outputs
(Examine the diagram in Figure 2-1 in the chapter.)
Function of Flow Sheets
- Flow sheets illustrate the flow of activities that capture information.
Flow Sheets Are Useful Because...
- They picture who is responsible for what piece of information as it enters the system.
(Examine the two examples of patient information flows in the chapter.)
Figure 2-2 Physician’s Office Flowsheet for Address Confirmation.
Figure 2-3 Health System Flowsheet for Verification of Patient Information.
The Chart of Accounts
- Outlines the elements of your company in an organized manner.
- Maps out account titles with a method of numeric coding.
- Is designed to compile financial data in a uniform manner that can be decoded by the user.
The Chart of Accounts
- Every organization has differences in its Chart of Accounts that express the unique differences in its own organizational structure.
(Examine the three examples of different Chart of Accounts formats in Exhibits 2-1, 2-2, and 2-3.)
Basic System Elements:
Books and Records
- Capture transactions
(Figures 2-4 and 2-5 illustrate this concept.)
Books and Records:
The Sequence Is...
- Initial transaction to subsidiary journal to general ledger;
- Review, adjust, balance through the trial balance;
- Create reports (financial statements).
The Annual Management Cycle (1 of 2)
- Affects the type and status of information the manager uses
The Annual Management Cycle (2 of 2)
- The type and status of information used by the manager includes:
Daily and Weekly Reports—Generally contain raw data
Quarterly Reports and Statistics—Generally have been verified, adjusted, and balanced. Called “interim” reports; often used as milestones by managers.
Annual Year End Reports—Generally represents the closing out of a specific reporting period. Primarily intended for external (outside) use.
Communicating Financial Information to Others
It is important to:
- Create a report.
- Use accepted terminology, standard formats, and executive summary.
- Organize in a logical flow.
- Place detail in an appendix.
