Financial statements shade a picture of financial health of an organization. Important parts of the financial statement of a health care organization are ratios. Analysis of ratios show how two numbers relate or compare to one another. Ratios are a way for organizations to make assessment. These comparisons not only encompass what is happening presently but can also be used to make comparisons about numbers and ratios over time. Managers are responsible for the business health of their firms. It is their responsibility to avoid financial mistakes. Since income is the life blood of any business, successful commercial arborists must comprehend and accomplish this stream of debt and equity capital. This can be used in several parts of their business operations, if they are to lead the firm in achieving set goals. As CEO of a hospital, I would initially use ratios to track financial performance by making sure the following stages are fully and effectively analyzed:
- Defining the purpose of the analysis.
- Undertake research on the effectiveness of ratios and which one will yield the best result.
- Collect all the data required to compute the ratios.
- Make, explain, and construe the ratios.
- Relate the ratios in an apt but effective way of comprehending the significance of the ratios.
- Make action plans in accordance with the effects of the ratio analysis and implement any action.
As a CEO, I would use liquidity ratios to track and measure the short-term solvency, i.e., the firm’s capability to pay its current levies. Additionally, the objective of calculating current ratio is to measure the facility of the initiative to meet its short-term liabilities punctually. It shows the number of times the current assets can be converted into cash to meet current liabilities. As a normal rule, current assets should be twice the current liabilities. Low ratio indicates inadequacy of the enterprise to meet its current liabilities and inadequate working capital. High Ratio is an indication of incompetent utilization of funds.
Capital Structure Ratios should be an example of a term that implies the ability of an enterprise to meet its obligation and thus carries an enterprise’s ability to meet its long – term obligations. Another impact that track performance issues in ratios is the important of solvency ratios, which are: Debt-Equity Ratio; Total assets to Debts Ratio and Proprietary Ratio. Asset efficiency ratios are an important way for the healthcare organization to efficiently measure the relationship between revenue and assets. Profitability ratios are used to calculate the ability of healthcare facility to generate earnings as compared to its expenses and other relevant costs over a specified time edge. Some background knowledge is necessary to make relevant comparisons when analyzing ratios. For instance, the retail industry typically experiences higher revenues and profits during Christmas season. Therefore, it would not be too useful to compare a retailer’s fourth-quarter profit margin with its first-quarter profit margin. On the other hand, comparing a retailer’s fourth-quarter profit margin with the profit margin from the same period a year before would be far more enlightening.
Example of profitability ratios is
| Gross margin % | Gross margin (expressed in $) / Sales revenue (expressed in $) | The margin earned from every dollar of sales after deducting the cost of producing the product/services sold |
The ACA increases entree to affordable health insurance by expanding eligibility for Medicaid benefits. The idea of Medicaid program is that it provides health insurance coverage to people with low incomes and is mutually funded by the federal and state governments. The Medicaid program is voluntary for states, which means, the states are not required to partake. However, all states are currently said to do so. Additionally, if a state chooses to participate in Medicaid, there are a number of options that it can designate, but it must follow certain federal rules and regulations.
The Supreme Court defended a majority of the Affordable Care Act, the milestone health legislation pushed by President Obama, plus the individual mandate. However, the court did state that one slice of the law pertaining to Medicaid must be modified. The court also defended a provision that expands Medicaid coverage to include all adults with annual incomes at or below 133% of the federal poverty level, which is presently at about $14,404 for an individual. In regard to the states supporting or opposing the updated Medicaid law, if states did not conform to extending Medicaid, the provision endangered them with withdrawing all Medicaid funding benefits. Additionally, the court also ruled that states which do not expand eligibility will only have to decline federal funds. These are meant for the expansion, not all Medicaid funds. The expansion could reduce the number of uninsured adults with incomes under 133% of poverty by more than 11 million by 2019, according to a Kaiser Family Foundation estimate.
According to the Kaiser Family Foundation, “according to the CBO, the ACA’s Medicaid expansion currently offers health insurance coverage to an estimated of 16 million low-income adults who, without the Medicaid expansion, will remain uninsured. Consequently, while overshadowed by the court’s consideration of Issues related to the ACA’s individual mandate, the court’s decision on the ACA’s Medicaid expansion is an important area to watch.” The final ruling on the Medicaid expansion could have important impacts on the present and future outlines of the Medicaid program, the people it is scheduled to serve, and Congress’s power to attach conditions to the federal funds it provides to states.
My favorite part of the final court ruling of PPACA came from Chief Justice, John Roberts, who wrote, “the Affordable Care Act is constitutional in parts and unconstitutional in another. The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause (CC). That clause authorizes Congress to regulate interstate commerce, not to order individuals to engage it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress’s power to tax.” The quintessence of this scenario is that the federal mandate is not a real mandate. It is a tax. All of the lower courts except the Fourth Circuit Court of Appeals, which said the federal mandate was a mandate and not a tax. “The federal government does not have the power to order people to buy health insurance. Section 5000A (of the Affordable Care Act) would therefore be unconstitutional if read as a command. The federal government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional because it can reasonably be read as a tax… The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the US constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” This is the scapegoat-twist in logic that Chief Justice Roberts devised his interest to vote in favor of ObamaCare’s being constitutional.
In my own view on PPACA, regardless of public opinion, however, the law is the law and it isn’t going anywhere. This means that states, health care providers, and other entities who have been dragging their heels with reverence to implementing the steps necessary to follow the ACA’s requirements may need to step up. Michigan, for example, will have to get moving on implementing the state’s health insurance exchange, which it had earlier delayed (ostensibly) in the hopes that the law would completely be struck down.
References List:
- Nawrocki, J. (July 3, 2012). Chief Justice Robert’s PPACA Opinion: Conservative and True To Form. Wolters Kluwer: Law and Health. Retrieved October 7, 2012 from http://health.wolterskluwerlb.com/2012/07/chief-justice-roberts-ppaca-opinion-conservative-and-true-to-form/
- Lombardi, V. (June 29, 2012). Chief Justice John Roberts. KFFL. Retrieved October 7, 2012 from http://forums.kffl.com/threads/297228-Chief-Justice-John-Roberts
- The Health Reform Law’s Medicaid Expansion: A Guide to the Supreme Court Arguments (March, 2012). Kaiser Family Foundation. Retrieved September 2, 2012 from http://www.kff.org/healthreform/upload/8288.pdf
………………………………………………………………………………………………………
