Healthcare Institutions


please respond tot the following discussion as a peer. Today’s health care services face escalating costs, quality of service issues, and many other complex financial risks. As a result, it is crucial for any health care organization to determine how to improve costs, address consumerism, and gain additional profits. Financial viability can be described as the ability to generate sufficient income to meet payments, debt commitments, and to allow growth while maintaining service levels (Dewar, 2017). When it comes to a health care organization’s financial viability, there are many factors that impact their financial statements. Some of these factors include:

1)    Excessive/Insufficient Inventory- When it comes to health care supplies, tracking inventory is crucial. Excess inventory can cost more money to store and can take up unnecessary space. Unused equipment can also indicate that the demand for specific health services are declining or that there is a need for updated equipment/supplies.

2)    Accounts Receivable- Having multiple bank loans, or owed debts plays a negative role in an organization’s credit policies and their ability to expand. It is important for health care organizations to closely monitor their balances that are not paid for or that are owed.

3)    Net Income/Cost Improvements-Having a reliable financial team who can assist with using net income ratios to gain insight on gross profits. Also, assets increase or decrease in expenses. It is essential for health care organizations to know their financial gains and losses in order to improve year after year. It is also important to know where similar health care organizations are financially to compare cost improvement strategies.  

4)    Working Capital/Staffing-This measures how efficiently current assets are used to achieve objectives. For example, determining the number of patients per health care worker without patients losing the quality of care.

5)    Sales Activity- In the health care industry, it is important to become aware of the current market and be aware of the rate of growth in sales/earnings to determine if the growth rate is due to increased health care demands or higher prices (Health Leaders, 2018). 

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