Accounts Receivable Management Discussion

Accounts Receivable Management Discussion

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Part 1

Accounts Receivable Management

It is critical that financial leaders have a firm grasp of the organization’s receivables, because roughly 75 percent of a provider’s current assets is tied up in AR (Zelman, McCue, Glick, & Thomas, 2014). In addition to your text, select three journal articles to support your conclusions. Complete the following:

  • Prepare a strategic assessment based on your research surrounding AR management and discuss three ways a health care provider can reduce days in AR.
  • Prepare a strategic assessment based on your research surrounding AR management and discuss three ways a health care provider can monitor days in AR.
  • Develop a perspective on the long-term financial trends surrounding AR management. Discuss the risks surrounding inadequate AR management.
  • Discuss three significant changes or trends that are taking place and their impact on the revenue cycle. Discuss how these trends will impact organizational strategy, patient care, and community health.

Prepare an 8–10 page paper based on the above.

Submission Requirements

Your paper should meet the following requirements:

  • Written communication: Your 8–10 page document should clearly identify where each grading criterion or part of the assignment is addressed by using APA-formatted headings and subheadings. Your writing needs to communicate professionally, with correct English usage. Your points must be logical, substantive, and relevant based on the evidence presented. In addition, your written communication must be free of errors that detract from the overall message.
  • APA formatting: Resources and citations are formatted according to current APA style and formatting.
  • Parts of document: Your paper should include the following:
    • Title page.
    • Table of contents.
    • Body of paper with APA-formatted headings and subheadings.
    • References.
  • Font and font size: Arial, 10 point.

Part 2

Materials Management

Materials management is an essential function in any health care organization to control the flow of supplies. Discuss the benefits and limitations of using a bar code scanner in the operating room for materials management.

Consider routine items and supplies that only have to be ordered on rare occasions. Who should be responsible when an item that was supposed to be ordered is not available, or when a surgery has to be cancelled?

Offer recommendations based on your research.

Remember to use citations and references as appropriate. You must follow APA sixth edition style and formatting guidelines.

Part 3

Present Value

Complete problems 19a, 19b, 19c, and 19d on page 287 of your Financial Management of Health Care Organizations text by Zelman, McCue, Glick, and Thomas.

Calculate the current value of the 120,000 dollars based on all of the discount rates listed. Post your spreadsheet to this discussion. In a paragraph or two, state what you learned or any tips for others working through this problem.

19. The chief financial officer of a home health agency needs to determine the present value

of a $120,000 investment received at the end of year 5. What is the present value if the

discount rate is

a. 3 percent?

b. 6 percent?

c. 9 percent?

d. 12 percent?

Remember to use citations and references as appropriate. You must follow current APA style and formatting guidelines.

Part 4

Payback, Present Value, and Internal Rate of Return

Explain the payback method, net present value method, and the internal rate of return. How are they similar and how are they different?

Remember to use citations and references as appropriate. You must follow APA sixth edition style and formatting guidelines.

Part 5

Break-Even Analysis

Write a 4–6-page paper discussing the importance of a break-even analysis when making a decision to lease or buy a piece of equipment. Research and provide an example of a break-even analysis conducted in a health care organization. Complete the following:

  • Prepare a strategic assessment of the sample break-even analysis you researched. Within your assessment, discuss when it is appropriate to use a break-even analysis and how a break-even analysis is done.
  • Analyze the financial data in the sample break-even analysis and explain the potential implications for the health care institution. Discuss the role of fixed and variable costs in the break-even analysis and how indirect costs and profit are factored into the analysis.
  • Evaluate the probable priorities and expectations of stakeholders surrounding this break-even analysis.
  • Discuss if you would develop a strategic plan to move forward based on the sample break-even analysis.
  • Explain how the sample break-even analysis might be used to make a long-term financial decision.
  • Assess the potential financial impact of the sample break-even analysis as it relates to organizational strategy, patient care, or community health.

Submission Requirements

Your paper should meet the following requirements:

  • Written communication: Your 4–6-page paper should clearly identify where each grading criterion or part of the assignment is addressed by using APA-formatted headings and subheadings. Your writing needs to communicate professionally, with correct English usage. Your points need to be logical, substantive, and relevant based on the evidence presented. In addition, your communication needs to be free of errors that detract from the overall message.
  • APA formatting: Resources and citations are formatted according to current APA style and formatting.
  • Parts of document: Your paper should include the following:
    • Title page.
    • Table of contents.
    • Body of paper with APA-formatted headings and subheadings.
    • References.
  • Font and font size: Arial, 10 point.

Part 6

Decision Making: Expand or Reduce

Complete question 10 concerning an expand-or-reduce decision on page 449 of Financial Management of Health Care Organizations. Show all calculations and provide recommendations for Ms. Gilbert.

10. Expand-or-reduce decision. Janet Gilbert is director of a lab. She has some extra capacity and has contracted with some small neighboring hospitals to run some of their lab tests. She has recently had a study conducted and has determined that her costs for these contracts are $50,000, of which $7,000 is the variable cost of supplies. The rest is nonavoidable fixed cost. She currently charges an average of $30 per test. She is thinking of lowering her price by 20 percent in hopes of raising her current volume of 20,000 tests by 25 percent. If she does so, she expects her variable cost per test will go up by 5 percent. Determine the current and predicted (a) revenues, (b) variable costs, and (c) total contribution margin and product margin. What should she be recommended to do? Why?

Accounts Receivable Management Discussion