Comparative Summary: Financial Environments

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Financial Environments: A Comparative Summary Dana Lawson HCS/577 October 7, 2013 Professor D. Chen Financial Environments: A Comparative Summary The health care industry accounts for a significant portion of the nation’s gross domestic product and expenditures. The influence of this industry on the nation’s budget steadily increases every year along with pressures from federal and state agencies to control rising costs. Financial management lays the foundation for sound operations at health care organizations, which then equips leaders and managers with the knowledge needed to improve patient care initiatives. Also, understanding the financial environments of the various health care entities will help leaders and managers to use resources more effectively to guide their respective organizations into financial stability. This paper will compare the financial environments of three entities, describe the policies unique to each type of financial environment, discuss common financial management practices, and explain the importance of effective financial management in health care. Not-For-Profit Entities Sentara Healthcare is the largest health network in southeastern Virginia. This not for profit organization has eleven acute care facilities, a nationally recognized cardiac center of excellence, a school of health professions, a health plan, and numerous skilled nursing facilities, rehabilitation centers, free standing emergency rooms, physician offices, and long term care facilities (Sentara, 2013). Sentara, as well as other not for profit organizations, is classified as a charitable organization under the Internal Revenue Service’s definition. A charitable organization is defined as any corporation, community chest fund, articles of association, or foundation that is organized and operated exclusively for religious, scientific, charitable, literary,

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