okay so the other thing that I wanted to mention before we start back into the lecture this is everyone familiar with practice with experts yeah okay so breakfast to the experts we've had a couple little changes - we've had a couple of changes to breakfast with the experts one of their courses that's a weird section at least 90 students notices of our undergraduate students so we had to move it so it's going to be or actually make it you can email HSN P breakfast et tu with your number and your name and we'll the course but the only reasons that you should be enrolled in the online section is if you're an online student or you have a class or it's it's in your syllabus but it's HSN P breakfast so just just enrolled in the d2l section and Cindy the email of all the specifications so any other questions before we get started yeah good luck success okay my vision for this is it's the basics of what it is to be healthcare accounting and finance so if you have a background in accounting and finance you definitely got an edge up there's gonna be a lot of math and copulations involved in this especially with your hyung works but I abused my job with this class to give you a basic foundation to be able to go into the workforce or go into your internship or going to graduate school or you know further your education and being able to at least understand the concepts of finance so if somebody talks to you about what their ROI is you can understand that that's a return on investment I don't have any know hey I know how to calculate that because we talked about that in accounting finance we're going to go over a couple of different ratios that I encountered when I was in the field working on that I think you should be familiar with and how to calculate those so we'll do like productivity will do days cash on K and things like that later on in the course but I just see the course as a mechanism to give you that foundation so that you can step into the workforce be able to at least carry on the conversation and talk to me about finance the reason that I don't go into it deeper than what I do is if you are interested healthier accounting and Finance we probably need to have a different conversation about where you need to go to get more in depth into accounting and Finance because you have people who are trained you know MBAs things like that who study nothing but finance this is to give you more of that well-rounded from an administrative side so when you go start leading managing things like that you can read your balance sheets you can read your statements and be able to understand what the information because luckily you're gonna have a financial analyst it's gonna crunch all the numbers for you everything I just want to make sure that you can understand so context behind it and then kind of what the information is telling computer ok so what we're gonna talk about and I'm a big believer in brakes I think it's hard just log down and take a break but I plan on taking on like you know thirty and thirty minutes or something so we're gonna talk the first chapter audience was everybody able to get the text you know maybe make sure you peruse the least chapter one the first two chapters are for some of you maybe kind of a review for some of you maybe not really talking about so we're not doing necessarily any calculations or anything today but just talking more about the background and it's really goes into finance how I always start out any class that I teach just so that you can kind of is how this class is so it should be too different for the certain so this is you know what this particular lesson is striving to go after in me and I won't go over every time I just wanted to kind of let us know why she really put the competency up there that's why the other thing I like to do to help students kind of get their minds around what we're gonna be talking about today you know the different concepts that we're gonna be talking about always that an agenda on the first couple song or you know in the first couple slides so you can see you know stands for course organization we're gonna define finance we're going to talk about the its role talk about it a couple different settings and legal and regulatory and some different then camera funky police lot I'm here or not but we'll try to sum it up with key points so the first thing finance the county before we go into this slide if you had to define Finance and Accounting healthcare how would you define it what kind of definition if you look ahead in your answer so how would you kind of go through and define it have a finance and health care if you just had to explain it to some random person once you notice on the street what do you guys think so that's one thing we're gonna talk about here on the next couple slides just when we start to define healthcare finance in a county it really depends on what you you're looking at it from so you're looking at it from a policy standpoint you're probably more concerned with the interactions about how payment structures happen Howry you know how certain reimbursement mechanisms happen how is if he's like CMS or operated things like that from a policy standpoint if you're looking at it from more of a managerial standpoint you're in far more concern let's say your department manager you're more concerned with your departments revenue and expenses you're just you're more concerned with kind of your ins and outs and what's going on with your department how you use those finance cheese to help you make decisions based on based on what's going on with your department you hire more you need to cut hours you know what's going on there the healthcare accounting obsidian serve healthcare Commons includes bowls accounting and financial management when we talk about healthcare organizations and why actually Synod you know why is it different than other services so how and why is finance particularly from a healthcare standpoint different from you know just regular finance you know finance and then once we put the term healthcare in front of it what kind of makes that stand out or what makes healthcare different just like any other organization what's healthcare apart from any other organization when we know about healthcare third party just remember if you answer to many speak up little kids apart recording we have the integration of the third-party payer in there so if you're you know out normal business structure it's just you in the business right making a transaction with healthcare we hope the introduction of this third party that kind of complicates things I'll talk about that in a second just as how we talk a little bit of information asymmetry which processes had a little bit of moral hazard but what's another reason that concepts healthcare apart from different services that we come in contact with I was promised healthcare primarily structured and so the way when healthcare is just a little bit different in tax structure I'm going over something that you already known you're like I wish you just go on you don't really understand it just stop me so when we talk about accounting so we have two separate entities we haven't healthcare accounting and healthcare finance so County is record that lets the outside world know how we are already you know what's our what's our health as a business and kind of what's going on in our organization what are our resources look like is our capital good struggling what's our debt to revenue ratio one of those things look like and so it's really just our record of economic events you can think of it kind of like the outside we're looking at us we're telling a story of kind of how our our businesses running as healthcare entity and that's one thing I find people for tend to forget and you know it's understandable because health care have these really altruistic beginnings right so we get into health care help people you know health care and hospitals just started as a way to help the sick helped them get better but people get or no not really think about is health care is a business just like anything it was just like Walmart or Target or Lowe's or wherever it's a business it still has to have some kind of structure to it it still has to have revenue coming in even though it's non-for-profit revenue coming in to be able to support the business operations so people tend to forget that you know forget that about health care because we are so focused in on more of its altruistic existence so moving from accounting into financial management so anything about financial management you can think of financial management more as like the internal way a business uses it so funny this is to direct decisions that's been made from the business operation standpoint so it's gonna it's still gonna involve a lot of calculations but financial management is gonna be more internal decisions to help us decide okay can we afford to go buy that new piece of equipment or can we afford to hire on an extra staff member you know what do our finances look like an or be able to support that so what do you think yeah so we would use a lot of accounting information is gonna drive what we kind of decide from the financials management standpoint but we still need some of those financial numbers to draw the accounting side that healthcare sorry usually I'd be walking off my clicker but so when you think of a business what are some characteristics that it was come naturally to you that you would think of a business we have to have some exchange of goods and services right so I'm coming to you I'm giving you money and you're gonna give me your nine with a glass case right so what else kind of characteristics do you make do this for business profits thanks good profits what else you think customers healthcare we call those what what else so I have to get financing somehow right whether that's we take out a loan we go into some kind of debt it's no different than your education right or some of you yes I got loans to finance your education you have to obtain financing be able to work in the marketplace you have to use those funds to buy assets so once you obtain your financing you obtain your loan you go out and buy your facility you buy your equipment you buy your supplies we have to go out and buy these different types of assets we operate to provide goods and services so we use those assets to do that and we sell them to create revenue and we start generating revenue with it so we think about how business is structured what we know about healthcare how can you combine those two and tell me what the difference between a business and what we consider pure charity is the finances can be different they may still have the same structure because they still are both businesses technically and still in operations but how does a business answer away so a business to operate it has to do something to bring revenue in right right so like it's selling its doing something and you have revenue that kind of supports all the activities that we do right so pure charity runs off people just giving you you're not selling anything people are just giving you money to run your organization I'm sorry getting donations grants things like that where as a business you have that exchange of goods coming back with a force to create this revenue piece so in healthcare we still have that exchange it's just exchange of healthcare services like I'm gonna be your nurse today let me do these different things for you and now we're gonna send you a bill so we have an exchange of some goods and services there right so for pure charity just everything that it does is financed by donations it doesn't do any activities mommy sell good or services to come generate that revenue I already apologized so activities you know helps us make decisions within an organization kind of talk about the business the structure of a business so what would you think the primary role of yeah like how do we measure whether we're being secure that we're successful as a business or not so finance is going to be to you know plan for our resources and we want to see you know this is where we can kind of talk back into quality anybody home mr. Youngblood or the Center for quality improvement or if you or if you've worked in quality for good on your internship to you know this financing improvement kind of go hand-in-hand because finance we're looking all about how we can maximize our efficiency so if we have a process it's like absoluteness paper three times along paying somebody to move this paper three times why can I just move it from here to here how are we gonna maximize not efficiency so that it reflects on our finances so that we can maybe make some better financial decisions in terms of our resources and our assets that we're gonna bring into the organization so I have a couple of different activities of Finance so we're going to talk about today we're going to sum them up at the end of this kind of little section here but there's seven activities of finance there's planning and budgeting and we're gonna go over each one of these individually with explaining budgeting financial reporting capital investment financing the city what we do with working capital contract management and financial risk manager go ahead and stop into just starting with planning more of your strategic planning which is you know strategic plan can be more of that high-level planning it's gonna be on your executive levels so top is top you have your C suite you're gonna have your directors and it's really just that fifty thousand foot view of your organization and it's gonna be very mission statement driven so what do we know so let's go back to planning for a second what do we know about the mission statement what's its purpose for an organization so everything made from a strategic planning level it ties back into the mission statement in terms of are we doing the activities that were set that we say we're doing in our mission statement so then we have tactical planning kind of a step down from strategic clean where this is more like five to seven years this is going to be looking more about two years in the future so a little bit down the road but not so far very tactical planning just seeing how we're gonna set up different processes to respond to things that we think are you know about imminent happening and then operational planning so just our day-to-day operations we're gonna look at the operational planning if you're nope you see yourself in or supervisory supervisory topic role you're going to be doing a lot of operational planning in terms of how you look at health care the accounting and finance to just plan your day to day operations especially you're going to use this a lot if you are in charge of scheduling I'm so Rachel you may be able you're maybe familiar with this just because of you know transport at the Med Center but a lot of how you schedule is determined on what's in your operational budget for that day so can I afford you know we have ten transporters on the docket for today let's say we're just overwhelmed do we have it within our budget to bring in another one so how do we kind of run our department day today and - you know it's not from scheduling just going into supplies and things like that which we'll get into later financial reporting these are more external reports and financial statements some of this I'm just going to kind of glance over because we are going to get into it later in the semester so don't want to spend a lot of time right now on it but financial reporting it's going to be looking more at those external reports and financial statements so that's going to be like your balance sheet your income statement things like that the next one we talk about capital investment and decisions so when you talk about capital investment unless has changed it used to be when let's say for example when I was at Mountain States any single purchase that's over a thousand dollars is considered a capital investment dress so I had to run through a certain process we had to get you know like 50,000 signatures on this one purchase but you know we got about to spend a lot of money because if we think back to you know our strategic operations everything is time I think the mission statement so every dollar you know every penny we spoon we can tie it back into our mission statement some way shape or form so capital investment investment decisions have to go through a certain process to make sure that it does to our mission statement we are buying it for a service not just because you know can we tie it back overall mission statement is and it's a financially sound decision for us to make so under capital investment there's gonna be two different type of budgets for and talked already talked about so one is operational budget just what it sounds like it's do we have the money to operate things that we need to do to operate as a business didn't get into that like you know that'll be kind of a theme throughout the semester and the capital budgeting these are more long-term it's not anything to pay off or longer so these things organizations part because you know these are upwards of on different things to bring into the organization so you can assume you know there's a lot of debate here around is this gonna help us drive our mission statement to drive us to achieve our business say it's time back into strategic planning so the example I have it's really really simplistic but I hope it gets I hope it's relatable one and can get the point across so about capital budgeting and operational budgeting everybody's a college student and everybody's how to go out and make a big purchase so my example here is gonna be you have to got in my car right can't walk around Johnson City everywhere got home way to get around somewhere so how you can think about the decisions that you make when you look at your revenue and expenses as a student got a job so you think about eight billion scholarships and parents or more of your donations so to bring in each on those and then you have went into some debt but oh my god about two thousand dollars your total revenue coming in is about fourteen thousand dollars right for the years so when you look at your expenses so you have tuition and books which turn in books seven thousand dollars I want to go to that University and then you have housing transportation obviously zero right now food and then entertainment so so how do you use capital decision-making you take your it's just as simple as you know it sounds simple it'll be more complex when you start looking at large financial sheets and you're doing millions of dollars but you just take your we know that our net is sixteen hundred dollars our new car purchase without a look around we know a new person costs about $1,500 or fifteen thousand dollars where decision-making comes in is you know the cost of the new asset that you want to buy you know what your net is so this is your pure profit revenue right you're not spending you can say this or whatever you want to do so do we have enough to justify buying this new asset or this new car does that kind of help to put this into some kind of context for you guys in terms of capital decision making like I said we're gonna touch on each one of these throughout the semester I just wanted to bring to the forefront so you trying to be thinking about how they're laid back so finance decisions we're gonna be asking for grants how are we gonna bring that money in to buy this capital that we'd be necessary that we need are we gonna do short-term bar short term versus long term borrowing so we're gonna do a short-term loan this favor payable within two to three years we're gonna take in their long term loan for you know maybe we have a purchase that's two hundred thousand dollars or thirty years so do we get into whether it's going to be do able to do it in the short term versus the long term now what do you think the advantage is I would personally rather pay back in the short term the interest right so pay back in the short term less interest less money I have to pay back if I really need this equipment I can't pay back the short-term choice but to pay back in the long term now once we get into calculating ratios and stuff we talked about this a little bit more and may be more beneficial to do the long term borrowing because our return on investments gonna grow as we keep the Machine we can bring in more money so maybe we are better and then what's our payment it'll look like so those are all the finance decisions that we have to think about and then working capital management this is going to be things like anything that we can offer offer up as collateral so let's say we you know we get down to the very bottom bucket of the money that we have what we put up for collateral so we have inventory we can sell that liquidate that we have accounts receivable people owe us money we can don't start collecting on that any cash we have in hand so it's any asset that we owe that we can kind of quickly liquidate to bringing that extra cash for us to have on hand contract management this is what I'm talking about towards the end of the semester in the smushed up chapters but how to negotiate monitor compliance with different contracts make sure that we get that load bonus you know this is a management or purchasing everything like that a skill that you're going to have to have in terms of how to negotiate rates and you know you have to do a lot of research if you're going to go into a field like that or to a job like that just because you have to be able to go out and research what's the going rate you know what's our competitor getting this cost for this supply for are we getting the best cost and hopefully kind of go out and negotiate those best rates and then financial risk management and this is all out of the finance department of course but just controlling how much financial risk we take so some investments are a little riskier than others they may not play out like we thought they would so financial risk management I think some decision support but the structure at a large organization like the Med Center mounts they stop lines you'll have the CFO so you know in the c-suite with the CEO of c and things like that you have the CFO which is the head of department usually analysts like that you'll have your comptroller who's over more of your accounting functions and how they manage the cash in and out and then your treasurer can makes those more following decisions in investment decisions now for smaller organizations you'll have just usually just the practice manager but think about how you know an organization like mountain stage is structured and then maybe a smaller organization practice you know - but why would it be harder for these smaller organizations to borrow money as compared to maybe some of these larger organizations assets right yeah so these larger organizations have more capital and assets that they can put up for collateral so you know we just talked about that on the last slide and how more that they can offer up in case something happens and they default on the loans of organizations or businesses are more likely to lend out so then the maybe smaller organization is because they have less to offer up in terms of collateral um so what's hard just a little bit about going back to this previous slide just to talk a little bit more about how things are structured just so that you can have an idea when you go into the hospital or the practice if you work with finance you can kind of understand what the change is you have the chief financial officer under that is going to be the Comptroller so again you know they're going to be in charge of your tables and then the money are coming in so every account the total balance you know every patient anything coming in to the organization the treasurer again just more aware financial risk management how we manage debt is this a good investment to make do we need invest in this stock what's the risk of it so they make those types of decisions and then a small medical practice again that kind of function is going to be encompassed by the practice manager so if you see yourself in the future you know going down the road to be some type of practice manager you're going to be in charge more often than not over all of these functions as compared to how its split out when we talk about larger organizations so to sum it up so everything we just talked about besides you really be summed up by the force what we call the four C's so we have cost minimization cash sufficiency [Music] capital access and control so just what it sounds like where are financial controls that we have in place to make sure that we can stay financially viable how are we gonna access capital and how do we kind of make those decisions on borrowing and going into that caps efficiency somewhere that comptroller piece on watching the ins and outs and then how do we you know of course this is should be the top of everyone's list how do we work to minimize those cost is that the recent our process improvement where we maximize efficiency cut out waste so how do we work to minimize that cost so I want to see so here's what we just talked about the seven activities audience if you had to kind of list them under one of these four C's how would you start organizing them together where would you put planning and budgeting why would you put it under control maybe control maybe capture sufficiency make sure that we have the finances there capital investment decisions I think maybe under pretty much any one of these I would think of a bit working capital management probably capital access write a contract what about contract management when you got contract management you think it would go yeah so we have contracts in place for a certain we're gonna pay X amount of dollars for this widget cost minimization yeah how do we drive out waste and more efficiently can we take on financial risk maybe a little can we afford to take on this capital and what's the return gonna come be okay so watchdog so we've been talking about 30 minutes you guys want to take another break do you want to keep going push through pickup with health service settings so now we're going to talk more about the different settings and this is where it may get into review for you guys I'm so if it's just absolutely boring into tears which just just give you the cue and we'll just keep moving on but we're gonna talk just more about where you'll find yourself or the different settings that you'll find yourself how they're different so just like I asked you for kind of the descriptor or what kind of characteristics you'd put it towards the business or the finance if you had to define like hospital inpatient care side what would you say about it in terms of you should describe it to somebody or what do you know about yes you typically have at least one everyone say you're in maybe an observation or an outpatient but we have two main designations for hospitals so you can have your general acute care like a Johnson City Medical Center or you want more specialty type hospitals no Co general cute care hospitals like John City Medical Center several years ago Mountain States Health Alliance had a hospital called Johnson City specialty hospital it was down kind of towards downtown area background for Scotch pizza and all that stuff's at Johnson City specialty was strictly a labor and delivery hospital so still hospital but more of that specialty type Hospital where they just did like her and delivery where Medical Center does you know your gamut of things you know you have surgery labor delivery inpatient or med surg you have nerve I mean it's all over the place so you have two main designations you can have as a hospital general key specialty other specialties you may have Woodridge that's a specialty hospital for behavioral health you can have hospitals that are sentences and like emergency fire departments more of your like ambulatory care centers you can have like or so hospital if you have neuro hospitals so generally fall into too many designations correct yeah you can have the specialty services like trying to think of my husband's a flight nurse and so he transports patients a lot he takes he takes burn patients to his specialty hospital in Nashville yeah yes so they're gonna get more intensive like if you are a burn house like if you take care of burn patient that's all you do you focuses so they're gonna be the industry experts whereas you get good care in acute care hospital but they have a wide array of focus we're specialty they're in on one certain thing right so out of the two main designations the two designations general an acute you're gonna have three different types of categories your help your non-for-profit which are sixty percent of all of your hospitals are gonna be non-for-profit your investor-owned which are gonna be so out of all the hospitals that exist way back that a second i'm all the hospitals that exist actually eighty percent are gonna be non for profit on those twenty percent are going to be private hospitals invest around and then you're gonna have the remaining percent are going to be your government military hospitals which the VA we have one right across the street i'm so this is gonna be like any government and your nonprofit hospitals [Music] I don't know what's a plane sorry they're not post this out on d2l as well I know they're recording the video can get a little weird and then recording saw us down this is going to have an integrated delivery system I'm as familiar with the triplets so how do you balance quality access without throwing it so if you really focus on one other two you're going to kind of be lacking put all your focus on quality then your cost will probably go up so what he's talking about here delivery system on how this is just the lines of hospitals came together how they're kind of working to work towards this tripling and balancing cost quality and access I just wanted him is kind of like an intro to set up a couple things that we're going to be talking about integrated delivery system for hospitals that can either be water we have a couple different settings that you're going to find yourself in another avenues but if you find yourself in healthcare find yourself in the leadership position one of these couple different settings so you're gonna have your hospital you know the one everybody with your possibility your patient care like John City met you could be an ambulatory care center where some examples I do story care centers rehabs like a walk-in clinic like a first day or like a first assist any other same day surgery centers you know we have one right here same day surgery center there see how ambulatory you know just a Beulah you're able to get up your little walk you're able to move so anywhere that you can finally get out get up and walk out same day inpatient we think amulet based on everything you've learned in class or what you know about kind of the environment of health care right now what do you think is [Music] increasing why do you think so yeah so go back to the four C's you know one thing what is cost minimization right so Ambulatory Care Center is definitely on that on the incline mainly because of cost you know we have like recovery time in general for for our patients so my example is you know when my mother was pregnant I mean she's been a week in hospital when I was pregnant my daughter I spent one night in the hospital because technology is just advanced to the point where we're able to put into place better some better practices to get our patients in and you know in and out quicker so they can get almost live just because you know we're trying to be smarter about money we're trying to we're essentially trying to do more with less so we you know if you spend any amount of time in the healthcare field you know we continually have less resources less money you know we're asked to do more so maybe the Tauri Care Center is kind of headed out because we're looking at how to minimize costs reduce ways and mainly to because of patient preference right nobody really wants to go to the hospital and say oh we couldn't - nice longer a patient surgical center because I wanted her out the same day I want her home where she's comfortable and I can take care of her and she's monitors around beeping you know I wanted it I felt confident in the surgical center and their abilities to kind of give me what I was looking for in terms of how I wanted to care for her after she had that done I'm so patient preference a big driver there as well long-term care another setting you're going to find yourself in so these are more like nursing home facilities where you're gonna you know you have an extended amount of time maybe you don't need say you still need maybe set a little more intense care especially with your geriatric populations you know they need many more people around and help them out rehab - if you're trying to get back on you know try to after surgery or car accidents I'm trying to get back to functioning um what do you think what's really the primary concern long-term care facilities kinda goes back lights into some other classes that you've had did a quick gut checks [Music] yeah to reduce things so their primary concerns to go along is their ADL's activities of daily living yeah it's where you can be independent functioning as much as necessary coming out on your own then we just saw the video with st. Charles Health System some integrated delivery systems and some different examples we actually have some right here in the trusses you have MSHA integrated delivery systems if you travel down the Knoxville area so all integrated delivery systems several systems come together to kind of work as one organism to deliver healthcare services single organizations sometimes can be integrated delivery systems health care services and kind of like I said this more unified manner where we're just kind of coalescing around one goal and just working as one so you think I'm a single organization that is you know bought up if you have a hospital you have a hospital that's nursing pound it may bought a rehab facility mental health insurance company and urgent care facility so that would be more like your integrated delivery system for a single organization and then you know just are able to offer more of your payers who which who would you consider your payers like your insurance companies so they're able to offer more it's called bundled payments you're able to offer more of a bundle kinda tortured for your third party payer so in business as a whole and we've talked about this already but as business as a whole it's mostly investor-owned right so we're more for profit you can buy shares buy stocks you get dividends off of what's going on but I think it was actually made towards beginning plus the thing that sets healthcare part is healthcare you're not going to find a lot of in this room I'm mostly non-for-profit so we're not beholding the shareholders we're not Holdings like hanging out dividends or means start you know paying out stock dividends or reporting to stockholders or things like that how much you think this influences how you practice as a business in healthcare now this is not to say that there are not any investor of hospitals there are you have I don't make you some of the news but you have one of the largest ones in the country community health systems right out of Nashville investor-owned you have one in Florida and the name escapes me so there are some investor own influences coming how you you practice health care five minutes or whatever to refer to do you really make your own decisions Ubuntu you are you still have some still have to be card so what's going on competitors but think about how really responsible so you really know you're there to exist to be responsive to the community when you have your board of directors for your non-for-profit it's generally made up of like industry leaders in the community right Mountain States has on their board leaders from all different kinds of industries not just healthcare and so you're looking at representation from the community and that's really gonna determine how you practice on it from a health care standpoint so since there are couple investor owns investor owned we're not going to spend too much time talking about investor semester but I want to go ahead and kind of give you this perspective or at least give you the background information so investor on corporations you purchase stock in the company so you own just a part of this company and your ROI or return on investment comes as either happy games that you receive a stockholder or dividends and then if the company of liquidates you can claim residual earnings based on that investor on they do pay property income sales tax whereas health care we're non-for-profit we don't really pay any of those types of those positive taxes in the investment and investor owned corporations you have two different markets where you can go and buy these different types of common stock so you have the primary primary transaction market this is when a brand-new company opens up for the first time in the market and you buy by the initial public offering or the IPO for the first time I'm out on on the market they've never been sold before and then those move into the secondary market transaction so you're kind of buying from stock brokers right so you go through stock broker instead of the company directly on exchanges stock holders they have one share of the stock and you know one share equals one one ownership piece of the organization they have six main rights and stock holders so you can vote on major issues you own part of the company so you have a say on how the company operates again you have ownership in the company you can transfer that ownership to somebody else through selling your stock you're entitled to any dividend so at the end of the year if there's all I think this is about money so sorry I didn't know this we're not in there and then you can go in and inspect the as a technical owner in the company and then you can sue for wrongful acts so this is you know everybody like class-action lawsuits and things like that that's another ride of a stockholder so the best around the primary goal is maximization dude I really since since investor on organizations are kind of holding to stockholders what do you think they really have any responsibility at large whether they're in the health care setting or not ha okay you said yes I said no right there goal is shareholder will that's why I'm here my job is to well health care to for-profit or around health care systems can kind of support their business operations so government regulations from CMS standpoint I don't know you know if they go after accreditation from Joint Commission yeah don't see like funding from CMS but you know we hope everybody behave ethically that there may be I don't know there are many incentive there to not I'm not gonna say one way or another but it is part of one of your ethical case study so just be on the lookout for that so not-for-profit corporations and in tax-exempt or the maker and call it by one c3 or c4 they don't have any shareholders and they're exempt from paying all kinds of these different taxes if I do on whether a lot of money is lost here right for non for profit since that's the majority of the healthcare industry not having to pay property taxes so there's been some debate back and forth on whether they should be required to pay for property taxes or income taxes or sales taxes but then bring in you know they're required you have so much charity care per year yeah should they have to pay taxes versus well do I ride this off as charity or something you know just something to consider primary goal I said is driven by their mission statement so their whole reason for existing or being in the community and what they can offer I was in this little thing where like how'd you guys guess what these missions things were but I'll spare you that so to become the best reasonable University in the nation ETSU and we deliver superior health care with compassion to provide students with high quality education experience focus on excellence in teaching research training hard skills prepare for diverse and interprofessional workforce and then bring a committed bringing loving care to health care of course that's Mountain States and my whole purpose for putting these up here was to show you these are all examples and nonprofit organizations and everything they do every activity that they undertake as an organization is driven by these simple missions you find yourself in a managerial role or a supervisory role or even an executive role now it's just something to keep in the back of your mind is especially if you work for a nonprofit organization you know are the things that I'm doing the supporting initiative save it you know when I come into work every day my mission is provide high-quality education because that's the mission of the College of Public Health and I need to be my mission as an instructor as well organizational goals for a non-profit our mission service to the community and while they don't have shareholders they do have stakeholders right every organization that's going to have some type of some type of stakeholder these people just have some type of vested interest in business but it gets tricky for non-for-profit managers especially in a healthcare setting simply because they're for-profit managers primarily concerned with satisfying stockholders but who would nonprofit managers the stakeholders right so who would be a stakeholder who would we consider a stakeholder in an organization like the Medical Center donors donors it was patients customers managers family members team members physicians nurses you know non-for-profit managers they've got they've got a lot of people that they kind of have to answer to you and keep happy and you know how do you kind of balance all that out so me so they have to really work to meet other requirements beyond professional health simply because you know they don't have any dividends if they do liquidate if they go out of business all you know all the proceeds from that look what they should go out to community care or community charitable purposes and they have public interest operations so we talked about you know donations just like charity patient comes in sometimes some healthcare organizations can write that off as charity care some of the donations they can be written off now no not for promise do you have to pay certain types of taxes and any donations to that organization is written off on their taxes but again you guys walk in non-for-profits managers can't be put in this more precarious situation just because they do have a lot of shareholders that they are stakeholders excuse me that they have to answer to say have a lot of people that they have to keep happy an answer to kind of how do you balance that whereas in a for-profit you know the only person you really have to be concerned about so there's four main categories of business organization partnership partnership corporation and hybrid I'm gonna will briefly go over each one of those so proprietorship on his own box one single person for any debt incurred for that organization so there's a couple and then partnerships of course you know just what it would sound like two or more people and then all partners are responsible for the debt so proprietorship partnership is going to be there's some advantages organization business organizations that you have unlimited liability in terms of you know that the owner can be responsible for any dead or any lawsuits or anything that kind of comes about towards the business a little more difficult for them to raise capital simply because think back to when we talk about smaller practices why it's more difficult for them to raise the capital and larger organizations right it's same thing here but smaller organizations don't have as many assets that they can put us what's harder for them to raise capital from that in any question so far corporation owned by shareholders advantages here and limited line so just the opposite of what we talked about the company can go on after the original owner passes away because you do have a little easier time transferring ownership and then disadvantages the cost of formation organization corporation which can get a little bit expensive and then you do have to pay double and sometimes triple the Taxation race because you pay taxes on your employees and I'm trying to pay another tax on them so you're kind of hit with the double whammy there in terms of Taxation hybrid forms how you can kind of combine proprietorship partnership corporation it together now something called a limited partnership where you have general partners and they're only liable for what they initially contribute into the organization and they're not really liable for as a partner or as an individual anything beyond that but we don't normally see this with healthcare providers there's familiar and then limited liability partnerships are the ones we do don't see a lot more because the partners share general liability with an organization a lot of professionals prefer the LPS LPS simply because the risk is something called a limited liability company so you have liability looks like you would with stockholders and your tax on your partner so it's just a hybrid form there of those two and then sometimes you can have a professional corporation or a professional association same type of business structure there's two different names you get the benefits of incorporation but the downside is you're still liable for the malpractice any malpractice lawsuits that come about but this is used a lot by individual clinicians simply because they don't want to take on the risk you know their partner messing up and then being liable for that so they just incorporate as their own kind of entity and get their future challenges and then I'll go back to finish last one a few future challenges and this will in this one do a quick check on the time and we can probably jump into the next one you I'm gonna be familiar with what is talking about his value-based purchasing and I started so evaluates purchasing one of the big initiatives that cannot from the affordable care act it's completely turned the way that we get rain birds the way we were traditionally used to getting reimbursed it's just completely for us we're trying to track we're trying to adapt as a healthcare organization but that's what it was talking about as you know is one of the greatest challenges that kind of face us as healthcare leaders especially those in finance is learning how to be adaptable to this value-based purchasing model that we're going to be seeing or that we're already seeing so we thought you know this gross domestic product so we have about 9,000 per person in healthcare services and you can see the trend I missed put in the past prettiest year but the trend has been kind of going on the upward incline in the last couple years but there's just so many issues that surround you know why this GDP numbers going up why we spend a lot of healthcare a lot on health care dollars and a lot of it has to do with government regulations a lot of it has to do with you know the way insurance is reimbursing what they're covering what they're not covering you know if you have an insurance company that's not covering certain services let's say prior to the ACA not everybody covered primary care visits so people weren't going in and getting primary care visits so if they had some kind of ailment or some fine sickness that was wrong with them they would weigh waiting wait till they got sicker and sicker and sicker and now they need to go to the emergency room which is 300 so a lot of issues are just surrounding the reason why we see this cheap GDP number continue to climb acha the american college of healthcare executives same thing that he's just talking about but financial concerns sit around medicare medicaid reimbursement we'll get into that within the next slide or the next slide that excuse me because this involves involves and revolves all around value-based purchasing and how we get reimbursed as an organization i'm the same thing with HIV may the health care planning financial management association just to going back to value-based purchasing and how we balance now that we're getting reimbursed are more of a quality indicator metrics on how down south are dances and then impact of healthcare reform which I'm sure you've heard you've never heard in any one of your classes ever the impact of healthcare reforms on the health on the health care field but you know we're seeing a lot more organizations one thing that's been very interesting at least me to see happen is the industry consolidation so we've seen a huge uptick in mergers within the last couple years hospital systems coming together and we have one here in our own area it's gonna be kind of interesting to watch Mountain States and well Mont kind of combine they're doing what they need to do to survive in today's health care environment and you know the big push that's been put on population health says health care organizations not only are going to be responsible for the health and care outcomes of their patients with the healthcare outcomes of their community so what is trying to do is push healthcare organizations into doing more community outreach and community programs to create these healthier communities so they're gonna start being reimbursed based on what's going on with their community population as well sorry industry the industry again this is probably one you if you had an organization law hopefully you got this in here but health care is probably one of the most highly regulated industries that you'll find anywhere in the world I don't think any I can't think of one that's regulated than what healthcare is in the United States so we have different licensures that you need you know to be required to practice so for individuals I could be Orient's how to take stage for words I'm saying with any of your clinical practice disciplines are gonna need some type of licensure to practice um and then just entering the market itself so you need something called a certificate of need to even enter in the market as a healthcare facility example of this a couple years well yeah a couple years ago before Franklin was was built we still had North Hospital John City specialty well mine was trying to put Hospital in like right down the road where the new Free Cities Act was actually where a new well known hospital was supposed to be located they applied for a certificate name through the state and were denied for that certificate of needs they weren't able to enter this market well mont henley in kingsport Bristol's where their market control is now mistakes for Johnson City area and partly in to Kingsport as well so it's a big win for Mountain State and then they turn around close Northside and specialty and come on that into Franklin woods so they didn't really need to apply for but entry into the market is just very difficult because you have to go through some different processes to show that you actually need a healthcare facility here you need this service here different state regulations federal regulations you have different things that kind of organization with ratios is another thing that you need to be familiar with the special if you're going to have plants managing an apartment especially clinical Tod Department ratio is talking more about if you're in critical care services ICU you have to have one nurse forever two patients you have the same ratio so how does that affect your budgeting how does that affect your staffing primary legal issues for healthcare some hospitals of my ability surgery if something goes wrong and your patient gets an infection you know hospital hospitals you know greatest legal issue facing them is liability and then providers of course it's going to be your malpractice so they pay an average about a hundred thousand dollars in premium it's not cheap to have malpractice insurance costs a lot because we have about 20,000 new cases a month approximately across the country a lot of the now not all of those get a court or not all those are awarded some are kind of thrown out for you know because they're privileged but the average award of those that are awarded they usually settle out of court you don't really see a lot that go into court and kind of have that legal battle but average award is about three hundred thousand dollars so you can see what the average premium is one hundred thousand you know if you're OB I think practice OB pay the highest premiums I don't want to say it's upwards simply because they have the greatest liability because if something happens to the baby of birds the baby and the family come all the way till the child is 18 years old to see that physician so they haven't know yeah they have a long time to kind of take some kind of action if something works happened and they can relate it back to the delivery room physicians pay the room and so for example here's a good example my husband is in graduate school right now he's gonna be a nurse practitioner and he started his clinicals this semester he had to go out and buy his own liability insurance now thank goodness because he kind of buys a group insurance through the school his rate was only like twenty five dollars for four months or something like that and it gives him a million dollars worth of efforts if he's out practicing in when he's out doing his clinicals if something happens he's covered up to a million dollars but yeah you have to go out we gotta go thank goodness it was only 25 bucks but you know when he does graduate and is a nurse practitioner on by his by his malpractice insurance and so other legal issues you know everybody hopefully is familiar if you're not we can certainly talk about it quickly but the issues around mountain states in Willmar why people crabber opposed to it if you follow our facebook page for the department we just posted an article about this not too long ago with the merger not going through like it was expected and then you had entities like Harvard Vanderbilt places like that writing a letter of no support for the merger because they're afraid it's gonna build this antitrust so what they're afraid of is that we're have any option for healthcare in this area and what they're afraid of is that process are going to kind of start to skyrocket because we don't have a choice so usually this is kind of our wrap-up each one of the lectures how we do the other one if I have to record all that you guys know I'll make a decision by tomorrow so we can spend a couple minutes going over this and then recapping the lecture how are usually in lectures is I'll let you guys make your own kind of self made study guide I don't give study guys for exams but we can talk about some information that we cover today and what you guys picked up on as kind of highlights and we can kind of do this self building study God so based on everything that we talked about today and I know we talked about a lot really that you think are important enough that you would see on an exam the four C's four C's maybe how the seven finance activities relate into that what else you think Oh the different goals between investor-owned and non-for-profit that's a good one maybe the difference between finance at a county probably be a good one and how would you define the difference in those [Music] you know I know this part it's not like really diamond so you have some general context of a couple things we're gonna be talking about let's say I was just inside a little bit about investor-owned like I said we're not gonna talk about that much throughout the semester so that's why I spent a little more time than I normally would here because this is probably one of the only times when a reference invest around throughout the semester so probably expect oh yeah we're all the finance would be good goals probably would expect to see something about the different types of business organizations so we talked about partnership and proprietorship where a proprietorship is one single person partnership is two or more people and just the different advantages and different advantages corporation and trying to probably brought the LPS and LLP so what the different kind of hybrid forms are that comes together and then just being able you know this you should be able to pull on what you've learned in other classes and you just make it educated you know insightful summary why do you think what are some challenges that he thinks we know we know we're expecting a nursing shortage is one right so how is that going to affect us from a financial standpoint now that everyone through the Affordable Care Act is required to have health insurance how is that going to thank us for my health administrators standpoint in a financial standpoint in terms of utilization of services you know reimbursement this is one thing I fail to go over but reverser for Medicare made hey you know we only get 70 cents seventy eighty cents on the dollar so for every dollar we spend on a Medicare or Medicaid patient we're only getting eighty cents back so we're taking a 20% loss you know any patient but we can't turn them away so how do we kind of compensate for our other patients that are non Medicare Medicaid to stay financially viable meaning I know I kind of flew through a couple things at the end so is there anything that wasn't clear that I can go over in we've got a few minutes and I'm like I said I'll make a decision on the other piece to this folder and stock holder are the same thing I just I don't confuse them but stake holder us it's hard to not interchange them with each other share holder and stock holder for profit they are the main person that the for-profit is kind of a hold into they have to maximize shareholder well stakeholder every business has some type of stakeholder and probably know the difference between why non-for-profit managers are in more of a precarious situation in terms of stakeholder satisfaction than for-profit managers that's a good question or if you think of any questions no email me preferably that way I can post it on the discussion for or on the newsfeed because I know probably - this is like a good first no there's a lot of information to kind of take in and come and throw you guys if you get follow me or just email me all right guys well that's all I have said we'll see you next
