Concepts Applied in Health Accounting
ACCOUNTING 1
ConceptsApplied in Health Accounting
The healthcaresystem is currently complex due to different funding sources. Theaccounting requirements, physical maintenance of facilities andinteraction with various organizations such as the federalgovernment, insurance companies, and charity groups call for accurateoperations. The paper discusses healthcare accounting concepts thatare unique.
Some of thehealthcare accounting unique techniques comprises conservatism,objective evidence, accounting equation, assets, and liabilities. Conservatism involves considerations of the risks that are likely tooccur when a given hospital fails to submit the required bills. Objective evidence requires accountants in hospitals to providereliable financial reports accompanied by sufficient evidence toensure smooth operations in healthcare centers (Finkler,Ward & Calabrese, 2013). In cases of a third-partypayment system, a healthcare professional has to ascertain the amountof money that has to be disbursed by a given insurance company, theemployer or the government.
ProvidersPay and Differences in Pay
Proper accounting ensures the healthcare providers are paidsatisfactory wages with the funds collected from direct payingpatients, insurance companies, and the government. Some diseases suchas cancer receive subsidiaries for the government and well-wishers.Hence, the amount payable has to be reduced when accounting. Aliability concept is based on the amount owed to the suppliers andlenders that consist of mortgages, accounts payable and loans. Theyare utilized to pay for daily operations purchase of large equipment.An asset is a common concept in healthcare. It involves items thathave economic value and aid in improving patient’s health such asCAT scanner (Finkler,Ward & Calabrese, 2013). Some revenues such asfrom charity organizations are not reported as revenues but utilizedin the purchase of key assets. The accounting equation is a conceptthat involves a combination of both net assets and liabilities, whichshould be balanced frequently to avoid double entry. Accountingequation ensures healthcare organizations provide quality servicesaccording to the government regulation Affordable Care and Patients’Protection Act of 2010 (Finkler,Ward & Calabrese, 2013). Other governmentregulators that oversee healthcare operations comprise DiseasesControl and Prevention Center. It ensures emerging, acute and chronicdiseases are tackled effectively in hospitals.
In conclusion, thekey healthcare accounting concepts enhance operations in hospitals.The comprise liabilities and assets. Healthcare centers have thirdparty systems and accountants who verify the amount to be paid one tobe registered as profit.
Reference
Finkler, S.A., Ward, D. M., & Calabrese, T. D. (2013). Accountingfundamentals for health care management.Sudbury, Mass: Jones & Bartlett Learning.
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