exhibit 13.1 functions of the finance system © 2016 foundation of the american college of...

EXHIBIT 13.1 Functions of the Finance System

© 2016 Foundation of the American College of Healthcare Executives(continues on

next slide)

EXHIBIT 13.1 Functions of the Finance System (continued)

© 2016 Foundation of the American College of Healthcare Executives

(continues on next slide)

EXHIBIT 13.1 Functions of the Finance System (continued)


EXHIBIT 13.2 Availability of External Price Information, by Type of Transaction and Level of Aggregate


EXHIBIT 13.3 Integrating Strategic and Operational Goal Setting


EXHIBIT 13.4 Major Budgets and Their Relation to Strategic Goals


EXHIBIT 13.5 Annual Goals and Budget Cycle


EXHIBIT 13.6 Major Steps in Developing Operations Budgets



EXHIBIT 13.6 Major Steps in Developing Operations Budgets (continued)


next slide)

EXHIBIT 13.6 Major Steps in Developing Operations Budgets (continued)


EXHIBIT 13.7 Tests and Adjustments in Financial Planning


EXHIBIT 13.8 Pricing Structures for Healthcare Contracts



EXHIBIT 13.8 Pricing Structures for Healthcare Contracts (continued)



EXHIBIT 13.9 Implications of Alternative Funding Sources for an Ambulatory Care Project


EXHIBIT 13.10 Organization of the Finance System


EXHIBIT 13.11 Operational Measures of Finance and Accounting


next slide)

EXHIBIT 13.11 Operational Measures of Finance and Accounting (continued)


next slide)

EXHIBIT 13.11 Operational Measures of Finance and Accounting (continued)


Questions for Discussion

1. Why are performance measures so complicated? Concepts like cost per case or percent postoperative infections seem simple enough. Why must we use Financial Accounting Standards Board rules and National Healthcare Safety Network definitions, and maintain internal and external audits? What would happen if we didn’t do these things? Would an HCO ever design its own measures that were different from the national ones?



2. Suppose you are on a PIT to evaluate an HCO’s goal-setting processes. What criteria should the processes meet? How could the criteria be measured? How hard would it be to benchmark them? Beyond the measures, what else would you do to identify opportunities for improvement in the process?



3. A hard-working associate says to a senior manager, “Our unit just got the bill for human resources. It was huge! We had to pay for the mandatory training for our new supervisor, plus the annual HIPAA, harassment, and disaster management training. Why do we have to pay for this? How do we know we’re getting a fair price?” How does the senior manager respond?



4. How much should the audit functions cost? The system described is expensive; many organizations complain that it is excessive. What exactly are the benefits the organization gains from those expenditures, and how are they measured? How will the organization judge whether the investment is wise?



5. How does the organization evaluate its capital and liquid asset management program? What questions would you ask, and what numbers would you ask for, if you were exploring this question with the chief financial officer and her financial management team?


Critical Issues in Financial Management

Supporting an evidence-based culture:

How accounting

•Identifies and reports costs

•Supports the annual goal-setting process

•Provides analysis and forecasts for performance improvement teams (PITs)



Providing adequate financial resources:How finance•Identifies long-term financial needs•Manages debt and liquid assets to meet needs•Negotiates contracts with health insurers to maximize revenue•Develops ownership structures that facilitate strategic partnerships



Promoting integrity:

How internal and external auditing

•Ensure accuracy of numbers, even those involving complex calculations

•Support a culture where honesty is expected

•Protect the organization’s assets


exhibit 13.1 functions of the finance system © 2016 foundation of the american college of...

Documents

healthcare contracts

finance system

major budgets

major steps

developing operations

pricing structures

strategic goals

annual goals