Module 5: Financing Healthcare

[Audio] Hello everyone welcome to the Module 5: Financing Healthcare presentation The course name is EDN 816- Financial Management in Healthcare Environments My is EMMANUEL MACLORD ANSAH I will be your presenter.

Doctor pointing on a large display. capital finance for healthcare organizations.

[Audio] We will be treating capital finance for healthcare organizations But before that let get a little overview of healthcare organization The primary goal of a hospital is to provide exemplary care to the patient population, but so much goes into doing this efficiently. Healthcare organizations must have high financial management to grow into a truly profitable business. Financial Management is the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization.

[Audio] Furthermore, Every business relies on financial management, but the healthcare industry depends on this due to all the internal and external variables that can raise the already high costs of healthcare. The regulatory legislation, reimbursement rates, hospital mergers, new technology, and other factors can reduce a company's capital. Financial management includes some disciplines critical to the economic health of organizations..

[Audio] Industry Outlook 64.4% Average US Population Who Visit their GP Regularly* 124Billion Healthcare spending 40- 60% Average profit Margin $ 175,000 is an average annual revenue per doctor 3% market growth per year.

[Audio] Healthcare Services Includes the following Extended Office Hours Call-in general practitioner Consultation Available Surplus Medical Supplies Pediatric and Family Medical Services In-house Specialist.

[Audio] Healthcare is one of those few things in the world that is truly important and will stand the test of time. Health care will exist in some form if human beings live and breathe. In healthcare, like in any other industry, the goal is to produce money while accumulating the least amount of debt possible. It would be an understatement to suggest that money is critical in healthcare. Salaries, new technology, innovations, charity, and medical equipment are all influenced by economic factors. For the long-term viability and performance of a major healthcare institution, solid financial management is necessary. For many aspects of the business, efficient and effective money management is critical..

capital finance for healthcare organizations. Financing for a health care provider's present and long-lived assets can be sourced from the following sources: P hilanthropy / Donations from rich organizations Grants or other monies granted from government Funds accrued from previous activities Short- and long-term debt products are sold. Ownership certificates for sale (stock). One other source available in some instances is funds from the sale of assets already owned..

[Audio] At least one of three factors determines whether a company has access to financial capital: Attract philanthropy (which, in practice, for-profit enterprises do not have access to); Obtaining governmental grants or appropriations is a substantial source of financing. For not-for-profit hospitals and government-owned hospitals (federal, state, or municipal).

[Audio] Earnings are significant not just as a source of money, but also as a means of securing cash via borrowing or stock sales. In theory, funds earned via company activities constitute a source of financial capital available to any continuous organization, independent of ownership type. When a company's yearly cash revenues surpass its annual cash costs, a fund like this is formed..

[Audio] Stock and Debt Financing Stock Ownership rights given to investors. Debt financing No ownership rights given up. Tax implications, for Stock Dividends are not tax deductible. But for Debt financing, Interest on debt is deductible. Set payments, for Stock Dividends are not required to be paid. But for Debt financing Debt service payments are legally required to be made. Amount of payments, for stock Dividend payment amount is at the organization's discretion. But for Debt financing Debt service payments are legally specified as to amount. Time limit of payments for stock No limit. But for Debt financing, Time limit is part of borrowing agreement. Restrictions on other actions, for stock Indirect through giving up of ownership. But for Debt financing Restrictions may be placed on operations and capital acquisition..

[Audio] Other Investment $ 1,100,000 – 21[ break]% Bank $ 1,000,000 – 20[break]% Debt Investor $ 2,000,000 – 39[break]% Owner Equity $1,000,000 – 20[break]%.

[Audio] Areas of funding in the healthcare. Worm view of buildings.

Specialist healthcare financing solutions from Siemens Financial Services for healthcare organizations Tailored financing solutions With no up-front investment, equipment pays for itself over time or as it is used. Increase Productivity Easier budgeting Predictability of payments wer time. Improved liquidity Working capital is preserved. allowing investment in other strategic priorities. Integration of add-ons Service and maintenance can integrated into the contract. so the equipment is more effective and efficient time. Additional line of credit No adverse effect on existing credit lines. This gives healthcare organizations: Better access to the best technology Finance will allow them to access the latest healthcare equipment - not just what they thought they could afford. Which ultimately enables them to: Enhance Patient Care Extend Market Access Improve Safety Improve Energy Savings Reduce Costs oot Improve Outcomes Specialist industry knowledge Through working with our team of trusted and local financing experts. Enhance Patient Experience Finance enabled solutions — transparent total costs offset against exs»cted outcomes 0'.er time of tangible ret tpnefit to custorner..

Scientist looking at test tube. References Charhut , Maureen M. (1984) Trends in Hospital Philanthropy. Hospitals 58(March 16):70-74. [PubMed] Cohen, Harold A., and Jack C. Keane (1984) Approaches to Setting the Level of Payment. Hospital Capital Finance Background Paper prepared for Assistant Secretary for Planning and Evaluation, DHHS. Washington, D.C.: Department of Health and Human Services. Cohodes , Donald R., and Brian M. Kinkead (1984) Hospital Capital Formation in the 1980s. Baltimore, Md.: Johns Hopkins University Press. Conrad, Douglas A. (1984) Return on Equity to Not-for-profit Hospitals: Theory and Implementation. Health Services Research 19(April):41-63. Reinhardt, Uwe (1984) Financing the Hospital: The Experience Abroad. Washington, D.C.: Department of Health and Human Services. Schlesinger, Mark J. (1985) Review of Cohodes and Kinkead , Hospital Capital Formation in the 1980s . The New England Journal of Medicine 312:323. Somers, Herman M., and Anne R. Somers (1967) Medicare and the Hospitals: Issues and Prospects. Washington, D.C.: The Brookings Institution, 1967..