Health Care Organizations
Suggest the key financial drivers that most likely will cause health care organizations to merge. Provide support for your rationale.
Cost is the driver that will most likely cause healthcare organizations to merge. Most healthcare organizations have issues with spending. Most industries today are faced with a variety of obstacles in achieving or remaining profitable. The healthcare industry is no exception. Profitability is enough of a challenge under normal circumstances, but especially so during fragile economic times. Uncertain revenue streams and rising costs have many healthcare organizations understandably apprehensive.
Traditionally, hospitals were more focused on managing revenues rather than on costs to insure profitability. But this focus on revenues has become increasingly more difficult to plan, execute and manage due to confusing healthcare reform, complex insurance reimbursements, community perception, government red tape and political concerns. Conversely, cost management has been a topic of discussion for the past decade but has not been a priority due to limited administrative resources.
Assuming that two (2) health care organizations have merged. Determine the evaluation criteria that a financial analyst would use to evaluate the financial performance of the organization post-merger, and identify the determinants that the analyst would use to decide whether or not the merger generated favorable financial results for the organization. Provide support for your evaluation.
Financial ratio exposes the position of the business in terms of performance and efficiency of operation. They show whether the management are efficient or inefficient in their utilization of resources such as capital assets, labor etc. The degree of leverage of a company is ascertained from financial ratio analysis and this will enable stockholders and other suppliers of capital known the degree of gearing in a healthcare’s capital structures. Prospective
Cost is the driver that will most likely cause healthcare organizations to merge. Most healthcare organizations have issues with spending. Most industries today are faced with a variety of obstacles in achieving or remaining profitable. The healthcare industry is no exception. Profitability is enough of a challenge under normal circumstances, but especially so during fragile economic times. Uncertain revenue streams and rising costs have many healthcare organizations understandably apprehensive.
Traditionally, hospitals were more focused on managing revenues rather than on costs to insure profitability. But this focus on revenues has become increasingly more difficult to plan, execute and manage due to confusing healthcare reform, complex insurance reimbursements, community perception, government red tape and political concerns. Conversely, cost management has been a topic of discussion for the past decade but has not been a priority due to limited administrative resources.
Assuming that two (2) health care organizations have merged. Determine the evaluation criteria that a financial analyst would use to evaluate the financial performance of the organization post-merger, and identify the determinants that the analyst would use to decide whether or not the merger generated favorable financial results for the organization. Provide support for your evaluation.
Financial ratio exposes the position of the business in terms of performance and efficiency of operation. They show whether the management are efficient or inefficient in their utilization of resources such as capital assets, labor etc. The degree of leverage of a company is ascertained from financial ratio analysis and this will enable stockholders and other suppliers of capital known the degree of gearing in a healthcare’s capital structures. Prospective