MHA 706 Module 1
Healthcare Finance - answer is the practice of finance, including both accounting and
financial management, within health services (provider) organizations
Accounting - answer concerns the measurement, in financial (dollar) terms, of events
that reflect the resources, operations, and financing of an organization
Financial management - answer provides the theory, concepts, and tools necessary to
help managers make better financial decisions
Business characteristics - answer-obtains financing from the marketplace
-uses the funds to buy assets
-operates the assets to provide goods or services
-sells the goods or services to create revenue
Pure Charity - answer refers to an undertaking for a charitable purpose only. The relief
of poverty, advancement of education, advancement of religion, promotion of health, the
obtaining of good government, and the accomplishment of that which is beneficial to the
community in any other respect are pure charities.
Primary role of finance - answeris to plan for, acquire, and utilize resources to maximize
the efficiency (and hence value) of the enterprise.
The Four C's - answercost minimization
cash sufficiency
capital access
control of financial resources
3 categories of business organizations - answerproprietorship, partnership, and
corporation (there are also hybrid forms)
Advantages of Proprietorships and Partnerships - answerease of formation, subject to
few regulations, and no corporate income taxes.
Disadvantages to proprietorships and partnerships - answerlimited life, difficult to
transfer ownership, unlimited liability, difficult to raise capital
Advantages to corporations - answerunlimited life, easy transfer of ownership, ease of
raising capital
Disadvantages of corporations - answercost of formation and reporting and double
taxation for investor-owned corporations
Healthcare Finance - answer is the practice of finance, including both accounting and
financial management, within health services (provider) organizations
Accounting - answer concerns the measurement, in financial (dollar) terms, of events
that reflect the resources, operations, and financing of an organization
Financial management - answer provides the theory, concepts, and tools necessary to
help managers make better financial decisions
Business characteristics - answer-obtains financing from the marketplace
-uses the funds to buy assets
-operates the assets to provide goods or services
-sells the goods or services to create revenue
Pure Charity - answer refers to an undertaking for a charitable purpose only. The relief
of poverty, advancement of education, advancement of religion, promotion of health, the
obtaining of good government, and the accomplishment of that which is beneficial to the
community in any other respect are pure charities.
Primary role of finance - answeris to plan for, acquire, and utilize resources to maximize
the efficiency (and hence value) of the enterprise.
The Four C's - answercost minimization
cash sufficiency
capital access
control of financial resources
3 categories of business organizations - answerproprietorship, partnership, and
corporation (there are also hybrid forms)
Advantages of Proprietorships and Partnerships - answerease of formation, subject to
few regulations, and no corporate income taxes.
Disadvantages to proprietorships and partnerships - answerlimited life, difficult to
transfer ownership, unlimited liability, difficult to raise capital
Advantages to corporations - answerunlimited life, easy transfer of ownership, ease of
raising capital
Disadvantages of corporations - answercost of formation and reporting and double
taxation for investor-owned corporations
