The three topics discussed include a thorough discrimination between the financial and accounting management. Another topic covers third party plates. The last topic covered to date discusses the reimbursement methods often put to use by third party players and risks surrounding it.
Financial Management is an accounting branch that manages finances of a business, individual, or organization. Financial management seeks to achieve diverse financial objectives. This also involves a company’s financial resources mainly for managerial purposes. The main key objective studies include the creation and improvement of the organization’s financial health. This is by either adding related resources or generating cash. As seen on the topic, this form of management studies and devises implementation plans (Zhuang, 2012). This is in order to offer satisfactory returns on investment. It considers all required factors. These include risks and financial management therefore tries to manage risks and protects the resources that it has made investments. Generally, it makes plans in order to ensure that there is a productive cash flow. This includes governing and maintaining a specific body’s financial asset (Doyle, 2012).
The main concern apparently is not the quantifying finance techniques but the assessment that will be carried out thereof. The science covers money management. There are three main financial management elements. These include financial control, financial decision-making, and financial planning. Planning entails funding that governs any form of management. It ensures that there is adequate funding that is always available. Financial management as analyzed above covers financial decisions on issues to do with dividends, investments and other finance related issues. Financial control protects a company’s assets or an individual’s assets and ensures their security and adequate utilization (Sages & Grable, 2010).
Accounting is the business language encompassing reporting of financial information or data on a specific individual or business entity. Accounting is divided into financial accounting or management. Management accounting occurs often if the accounting report focuses mainly on the individual found within the organization (Zhuang, 2012). Information in management accounting is provided to managers, employees, owners, and auditors. The report is often used as a basis mainly when making operational decisions or managerial decisions. Financial accounting on the hand deals with the provision of information for people found outside a business or organization. These include analysts, creditors, potential shareholders, government agencies, and economists (Doyle, 2012).
Reimbursement is a healthcare term. It refers to the repayment or compensation for any healthcare services. This act of being compensated or repaid mainly for expenses has already been incurred. In healthcare cases, this goes mainly for services already provided in advance. In healthcare, services are often provided way before any paying is made. This is unlike car dealerships where customers have to pay for a car or arrange for a loan before leaving with the vehicle. Patients often sometimes due to Medicare and other insurances walk out of the hospital without paying immediately after treatment (Avraham, 2011). The physicians as well as the clinics therefore must seek payment for the rendered services. These services have already been provided for. This also includes expenses for example supplies, which on most occasions they have already incurred. These clinics, physicians, practitioners, healthcare organizations and hospitals request for reimbursement because of the given health services (Avraham, 2011).
Third Party Payment involved health care finances. Experts who deal with healthcare finance often refer to third party payers or third party payment as people involved with the reimbursement. The first party is made up of the patient himself. This can also include the person for example a parent who is responsible for the health bill of the patient (Doyle, 2012). The second party is the clinic, health care facility, physician, or nursing home that renders the healthcare care. The second parties are the providers who provide health care. A third party on the other hand is an uninvolved health agency or insurance company. It pays the clinic, physician, or any other second party providers involved in caring or providing services toward the first party (Avraham, 2011).
There are various reimbursements. One of them is a fee for services offered form of reimbursement. This is a healthcare payment method whereby providers receive payment for the specific service rendered. Another one is self-pay whereby guarantors or patients pay specific amounts for all the services received. The last option is the retrospective reimbursement payment method. This involves paying the providers only after the rendered services. It is a type of fee for service since providers receive their reimbursement for each of the offered services (Sages & Grable, 2010).
A tacit assumption is on fraud that has been rampant in the healthcare department in organizations and clinics. This form of fraud goes up to close to $12 billion dollars annually. Research done shows that lack of internal controls is the biggest problem found in fraud reduction mainly for the organizations that have fallen victim (Doyle, 2012). This generally emphasizes the importance of coming up with an audit department in health organizations and organizing financial audits and code of conduct among the employees.
Avraham, R. (2011). American Journal of Law & Medicine. Clinical Practice Guidelines: The Warped Incentives in the U.S. Healthcare System , 7-40.
Doyle, B. G. (2012). Caribbean Business. MCS: A major player in quality healthcare and insurance , 1-2.
Sages, R. A., & Grable, J. E. (2010). Journal of Financial Service Professionals. Financial Numeracy, Net Worth, and Financial Management Skills: Client Characteristics That Differ Based on Financial Risk Tolerance , 57-65.
Zhuang, Z. (2012). Contemporary Accounting Research. Management Guidance and the Underpricing of Seasoned Equity Offerings , 710-737.