Comparative Summary

* Health care financial environments most common are for- profit, not-for-profit, and government funding. This paper identified one entity from each of these health care financial environments, described the financial structure of each financial environment, identified policies unique to each financial environment, identified financial management practices prevalent in the financial environment, and explained why effective financial management is more difficult in health care than in other industries. The first one is Health Management Associates, Inc. founded in 1977 to own, lease and manage hospitals throughout the United States (Health Management Associates, 2011). Today HMA operates fifty nine hospitals in …show more content…

Some of the more important ones are planning and budgeting, establishing policies that control the operations of the organization, and overseeing the day-to-day activities of subordinates (Gapenski, 2008). In general, the financial management function includes evaluation and planning, long-term investment decisions, financing decisions, working capital management, contract management, and financial risk management (Gapenski, 2007). Financial management involves evaluating the financial effectiveness of current operations and planning for the future. Managers at all levels must be concerned with the capital investment decision process. Such decisions, which focus on the acquisition of new facilities and equipment (fixed assets), are the primary means by which businesses implement strategic plans, and hence they play a key role in a business’s financial future. All organizations must raise funds to buy the assets necessary to support operations. Such decisions involve the choice between internal and external funds, the use of debt versus equity capital, and the use of long-term versus short-term debt (Gapenski, 2007). The organization’s current, or short-term, assets, such as cash, marketable securities, receivables, and inventories, must be properly managed both to ensure operational effectiveness and to reduce costs (Gapenski, 2007). Managers at all levels are involved in short-term asset management, which is often