Question

1.1a.What does the term healthcare finance mean, as it is used in this book?

b.What are the two broad areas of healthcare finance?

c.Why is it necessary to have a book on healthcare finance as opposed to a generic finance book?

Answer 1

Answer(a): Healthcare Finance- It is the financial management of healthcare industry. It ensures the proper funds in healthcare, reduces financial barriers in healthcare sector. Healthcare financing includes generation, allocation, analyzing and uses of financial resources in healthcare industry. Healthcare finance provides equal access of healthcare service to the population.

It also includes strategies to optimum utilization of healthcare resources and lower the cost of healthcare so that maximum people get better healthcare services at lower prices.

Answer(b): Two broad areas of healthcare finance

Financial Accounting- This accounting keeps track on financial transactions of healthcare industry, With the help of financial accounting, financial transactions are recorded in the books of accounts, analyzed and reported. Financial statements are prepared to know the actual revenue and expenses of the healthcare business. This accounting is for external use

Managerial Accounting- This accounting is used for managerial decision making. It identifies, measures, analyzes, interprets and communicates the financial information of business. This accounting is for internal purpose, for taking decisions. This accounting calculates different types of cost at different levels and tries to minimize the cost.