Healthcare Finance

  1. What is meant by the term “healthcare finance” as it is used in the textbook?
    1. “The term healthcare finance, as it is used in this book, refers to the accounting and financial management principles and practices used within healthcare organizations to ensure the financial well-being of the enterprise.” (quoted from text book)
  2. What are the two broad areas of healthcare finance?

Healthcare finance has two broad areas and they are Accounting and financial management. Accounting is the business transactional records of an organization. Financial management is the application of various theories and financial concepts that help in making better financial decisions.


  1. Briefly describe the following healthcare settings:
    • A hospital is a health care institution that provides treatment for patient. It has specialized equipment, medical and nursing staff.


  • Ambulatory care


This is an outpatient-based medical care that includes diagnosis, observation, treatment, consultation and other services.

  • Home health care

This is a wide range of patient care services that is offered at home. It include physiotherapy, care for injuries among other medical needs

  • Long-term care

This is a multiple of medical and non-medical services offered to help patients with chronic diseases or disability that are not able to take care of their condition for a long period.

  • Integrated delivery systems

This is a group of health care organization networked under one parent company. IDS constitute network of hospitals and physicians.


  1. What benefits are attributed to integrated delivery systems?

-Integrated delivery system enhances quality of healthcare while lowering costs.

– The model promotes sharing of information hence prevent moral hazard among doctors.

– It promotes co-ordination of activities hence facilitate efficient provision and access to quality health care.




1.4      What role does regulation play in the healthcare industry?

Regulation of healthcare industry is important in controlling healthcare insurance premium. Besides, nurses’ curriculum review and quality policies require regulation. Emerging legal and ethical practices in healthcare sector require regulations.


1.5      What is the structure of the finance function within healthcare organizations?

The structure of finance function flows from chief financial officer to the accounts clerks. In the healthcare organizations ’billing department is a system integrated in such a way that all transactions are coordinated and generated reports used to make decisions.

1.6      What is the primary legal issue facing provider today?

The primary legal issue facing healthcare providers today is the breach of confidentiality and negligence








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