Financial Responsibilities in a Nursing Home In health care organizations, managers have

Financial Responsibilities in a Nursing Home
In health care organizations, managers have many responsibilities and tasks to perform. To ensure that the organization operates efficiently, managers must be aware of the financial elements that are needed in his or her daily operations. In all health care settings, managers must perform planning, controlling, organizing and directing, and decision making. Although different settings may have different financial numbers such as inputs and outputs, they all operate under a similar structure, which includes profit oriented (Proprietary Organization) or non-profit oriented (Voluntary Organization). These orientations describe the taxable status of organizations. Profit oriented organizations are responsible for paying income taxes while non-profit organizations do not have to pay income taxes. Each health care organization may differ as they have the status of being profit or non-profit oriented. For example, many nursing homes or long-term care facilities are profit-oriented; however, there are few that may be non-profit oriented.
Being mostly profit oriented facilities, planning and accounting become critical aspects to smooth and profitable operation. The annual management cycle becomes a major part of the operating structure. Paying close attention to the daily, weekly, quarterly and annual reports is a must. Reports like the general ledger and chart of accounts help operators make sure that costs and expenses are in line with income.
Today, most of these components are done in the digital media form. With patients charts now digital as in the EHR (Electronic Healthcare Record) and the EMR (Electronic Medical Record). These are used to help capture and retain medical records and improve quality, reduce errors, and therefor reduce administrative costs.
By using the managerial accounting system and the various reports. The facilities can closely monitor their inflows(revenues) from their fees from services provided whether paid by private insurance, Medicare /Medicaid programs or patients self-pay. The same can be said on the other end of the accounting system as these same reports can help facilities track all outflows(expenses). These outflows would include but not be limited to; general service expenses, support service expenses and operational expenses. An expense being anything that the facility has to spend money on in order to provide the services to each patient. The difference in the inflows and outflows is what the facility will consider to be its profits. A for profit facility needs to ensure they are profitable to maintain their operational status and continue the care and services it provides.
A nursing home administrator or long term care manager utilizes these concepts to accurately keep track of the expenses, as well as revenues. Without these accounting systems and reports, managers may struggle to analyze areas of improvements, as well as strengths for the facility. Regardless of the facility’s tax orientation, a manager must be able to have accurate records to provide to state and federal representatives when needed. Because nursing homes and long-term care facilities may utilize Medicare and Medicaid programs, it is important for patients’ records to be accurate so these facilities can be financially compensated. Overall, a manager in any health care setting must plan and pay close attention to his or her facility’s clinical and financial reports.