Health Care Financial Management: Reporting Practices and Ethics

1388 words 6 pages
Health Care Financial Management: Reporting Practices and Ethics Marvin Dumlao HCS/405 April 6, 2010 Lisa Sanders Health Care Financial Management: Reporting Practices and Ethics
Whether operating as for-profit or non-profit, organizations must pay close attention to accounting practices and adhere to sound financial management procedures to remain solvent. This applies to health care organizations as well. With the costs of health care continuing to rise, it is not just consumers who have to manage budgets carefully. According to Hyman (2010) the cost of providing those services, the way patients pay for these services and the
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Financial managers must make everyone aware of financial ethics and ensure they address financial ethics issues promptly (Tyler, 2004). Summaries of Relevant Articles An article by Clarke (2009) illustrates the importance of avoiding fraudulent activities in health care. Whistle-blowing concerns healthcare organizations because of the possibility that employees may file lawsuits under the Federal False Claims Act. A whistle-blower lawsuit, as defined in the Federal False Claims Act, occurs when a person initiates a lawsuit if that person believes his or her organization has submitted fraudulent claims for payment to the United States government. The article emphasizes that incentives for whistle blowers, with awards for up to 20% of the recovered amounts, can offset any conflicting loyalties to their companies. Another article relates directly to the elements of financial management. Health care reform, although the extent of its impact on the industry is unknown, will put health care organizations under much pressure from insurance companies and the government, when it comes to reimbursements. According to Langer and Renaud (2010), hospitals will have to “improve efficiency and productivity to maintain cost ratios and returns for owners and investors” (p.1). To accomplish this, health care organizations may have to utilize the principles of Lean and Six Sigma process

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