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Each question 200 words
1) Who are the major stakeholders utilizing healthcare financial information? List the key stakeholders, and briefly describe how each of them uses financial information in their role.
2) why is it so important to creat a five year strategic financial plan, not just an annual budget?
3)Why is financial ratio analysis crucial for understanding the financial position of a healthcare organization? Select any three of the commonly used financial ratios, provide the formula, and briefly explain what it tells us about the status of the healthcare facility.
4)explain the difference between fixed and variable costs for a healthcare organization. Provide and discuss at least one example of a fixed cost in health care and one example of a variable cost in health care.
Explanation & Answer
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Running Head: Financial Healthcare
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Financial Healthcare
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Financial Healthcare
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1. Major stakeholders using financial information in healthcare organization
The major stakeholders within a healthcare organization are the governing board, the top
management, the suppliers and the creditors. The governing board uses the financial information
to assess operational efficiency of the healthcare organization and also to evaluate this healthcare
organization’s financial condition in order to approve the rates of the HCO. The governing board
wants to make sure that there is efficient provision of services and that the established rates are
sufficient to guarantee an improved or stable financial condition. Yet again, the top management
also uses the financial information to evaluate the financial condition of the healthcare
organization to ensure efficient and smooth operation within the economy.
Suppliers are also interested in the financial information of a healthcare organization. They
typically show interest in the short-run financial condition f the healthcare organization as this is
the period that they must expect payment. The creditors, for instance, the investment bankers,
being the o...
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