Financial Environment Comparative Summary The financial structures of health care entities not-for-profit, for-profit, and government are different with funding, ownership, and type of services provided. Financial managers, financial markets, and investors are the components that make up the financial environment. Financial managers rely on investors to supply funds through financial markets when determining whether to use debt or equity financing. To ensure full utilization of financial resources it is important to understand the financial structure. The purpose of this paper is to compare the financial environment of for-profit Saint Francis Hospital, not-for-profit Cleveland Clinic, and Tomah Veterans Hospital. Compared are the
“These hospital types operate under different legal rules. For-profits may distribute accounting profits to shareholders, whereas government and nonprofit hospitals enjoy income and property tax exemptions” (Horwitz, 2005, para. 5). The difference is different ownership interests on the balance sheets between the organizations.
Financial Environment Polices Polices are important for carrying out the roles and responsibilities in all organizations. The financial policies vary with each organization by having their own distinct policies and practices. Cleveland clinic polices are guidelines established by the board of directors for financial issues complying with state and federal regulations. “The Board of Directors has overall legal responsibility for the financial health and need to understand key financial information” (N. C. Centers for Nonprofits, 2010, para. 1). Complying with the Financial Accounting Standards Board (FASB) is a must for not-for-profit entities and the board of directors is responsible to ensure the standards are followed. For example a not-for-profit financial policy is the charitable donations are income and required to be accounted for regardless of its purpose. For profit polices at Saint Francis hospital also use standards from the Financial Accounting Standards Board (FASB) to manage and meet financial goals. Saint Francis business philosophy states “to achieve a competitive return for our investors” (Saint