The Financial Environment: Questions & Problems
Questions 2.1, 2.2, 2.3, 2.6, 2.8; Problems: 2.1, 2.5
2.1 The three primary forms of businesses are: Proprietorship, Partnership, and Corporation.
Proprietorship: Easy to create form a legal perspective, inexpensive to create, subject to few governmental regulations
Partnership: Low cost and easy to form, income is taxed as personal and not corporate.
Corporation: Corporations have unlimited life, easy to transfer ownership, owners have limited liability.
Disadvantages of proprietorship and partnership:
Selling interest is ...view middle of the document...
Whereas not-for-profit takes an approach that seeks to balance qulaity care, outcomes,
, d. The agency problem is one that arises between principals and agents. For example, a conflict between owners of a company and managers.
2.6 Managed care plans seek to combine both insurance and helathcare services for the puposes of manging cost and qulaity.
2.8 Cost based:
Incentives: Guarantee that costs will be covered by payments from the payer.
Risk: Many hospitals are no longer covered by the payment system. CAH hospitals are, but only if the law remains the same over time.
Incentives: An understanding of what payment will be based on what the provider provides in the chargemaster.
Risks: Reimbursement systems places payers at the mercy of payers.
Incentives:an extra charge is given on a per procedure basis.
Risk: High administrative costs have pushed this out to a more outpatient setting
Incentives: Paid at a rate that coincides with a diagnosis; the more complex, the more the reimbursment