There is an article in the New York Times paper that is related to the healthcare industry. The article “ How to Tame Health Care Spending? Look for One-Percent Solutions” by Sanger-Katz has financial terms. According to the article, the cost of health care systems in the United States has doubled, but the quality of services delivered has not improved. The health economists are trying to adjust policies that could result in high savings in the health care sector. There is a need for the healthcare industry to offer high-quality healthcare services that meet the high fee charged on patients. The financial terms evident is this article are assets and net worth.
Assets are items that the healthcare industry owns to enhance its daily operations, and they are considered to be an investment by the industry. Examples of assets include buildings, machines, cash, ambulances, among others. The availability of assets to any organization will positively impact the effectiveness of the medical services to be delivered (Dong, 2015). Cash is an example of an asset as depicted in the passage. It is said that the costs of health care services in the country had doubled beside them being expensive. Every patient that had been attended to was required to pay a certain amount to the healthcare industry. The amount paid becomes an income to the industry and an expenditure to the patient.
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The net worth of an organization refers to the financial position of the organization after the trading period. For most healthcare industries, the trading period is usually one year. At the end of the trading period, the organizations prepare a financial report that shows how the firm has performed. For instance, in the article, it is reported that annual health spending was $3.3 trillion. The amount the industry earns from the health care services to patients is also taken into consideration.
Any healthcare industry aspires to provide quality medical services to its clients. The policymakers have set the quantity and the quality of healthcare services that any healthcare industry should strive to achieve. A healthcare industry with appropriate assets will be in a position to provide effective services to patients than an industry with a few assets. An industry with a large geographical space fitted with modern machines will accommodate more patients and carefully attend to them without any difficulty. Such a stable industry can adopt technology that will positively impact the quality of service to be offered to patients (Baker, Baker & Dworkin, 2018). Therefore, the healthcare industry with less investment is disadvantaged and is prone to incur losses in its operations.
Major healthcare industries incur different costs in their operation, and these costs should be kept as low as possible to realize profits. The healthcare industry has come up with various ways to achieve profit. It is reducing the number of nurses to a certain amount that the industry will afford to pay without straining. This step helps the industry to curb the rising labor costs. The industry should charge a reasonable fee depending on the quality of health care service they offer to clients. A client with a serious illness such as cancer will have to pay a higher amount than a patient suffering from malaria.
It is important that any healthcare industry wishes to attain profit in the long-run. This is realized by comparing the amount the industry earns from patients and the costs they incur in providing those health care services. The healthcare industry has all the features that make to be a business on its own. It is vivid that businesses always desire to realize a profit by the end of the trading period. It is, therefore, upon the healthcare industry to use the available assets effectively improve the quality of health care services to have profits.
References
Baker, J., J., Baker, R., W., & Dorkwin, R. N. (2018). Health care finance: Basic tools for nonfinancial managers. (5 th ed.). Burlington, MA: Jones & Bartlett Learning.
Dong, G. N. (2015). Performing well in financial management and quality of care: evidence from hospital process measures for treatment of cardiovascular disease. BMC health services research , 15 , 45. doi:10.1186/s12913-015-0690-x.
Sanger-Katz, M. (2018 August 27). How to tame health care spending? Look for one-percent solutions. The New York Times. Retrieved from https://www.nytimes.com/2018/08/27/upshot/rising-health-care-costs-economists-propose-small-solutions.html.
