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well as federal government settlements with providers on fraud and abuse allegations; cost accounting and analysis; and reimbursement, including charge setting.

Part III covers the management and financing of working capital; the management of the revenue cycle, including the distinction between the revenue cycle and accounts receivable; and materials management.

Part IV focuses on resource allocation and includes strategic, strategic financial, and operational planning; budgeting; and capital budgeting.

Finally, Part V provides an analysis of trends that will affect healthcare organizations in the future, including healthcare cost projections and the need for entitlement reform. The Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIPS Reauthori- zation Act (MACRA) of 2015 are discussed throughout the book but more prominently in Parts II and V.

Each part of the book includes its own recommended reading list. A running glos- sary of important terms accompanies each chapter and is compiled at the end of the book; a list of acronyms used in the text is also included at the end of the book. At the end of every chapter, important points and discussion questions encourage students to summarize what they are learning and put it into their own words. The chapters are modular to allow instructors to either delete specific chapters or assign the chapters in an order based on individual preference or classroom requirements.

I hope you find Introduction to the Financial Management of Healthcare Organizations relevant, current, and easy to understand.

Acknowledgments I would like to gratefully acknowledge those who assisted me in this seventh edition: my wife, Tracey, and our kids, Hannah and David, who have often sacrificed time with Dad so that I could write; my many students over the years, who have challenged me to find a better way to explain, teach, and evaluate the understanding of difficult concepts; Thamarai Selvi Sundararajan, my graduate assistant, who helped proofread the book and provided the valuable supplemental materials; Texas State University for continuing to support faculty research efforts; and Dick Clarke, president emeritus of HFMA, who in ways too numer- ous to mention has always supported my academic career. Finally, special thanks to those at Health Administration Press who have made this seventh edition what it is.

—Michael Nowicki

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Instructor resources Thisbook’sinstructorresourcesincludeatestbankofmultiplechoicequestions; additionalshort-answerandfill-in-the-blankquestions;PowerPointslidesinboth

outlineandSocraticformats;andanswerguidesforthein-bookdiscussion questions,mini-cases,andend-of-bookcase.

Forthemostup-to-dateinformationaboutthisbookanditsinstructorresources, gotoache.org/HAPandbrowseforthebookbyitstitleorauthorname.

Thisbook’sinstructorresourcesareavailabletoinstructorswhoadoptthisbook foruseintheircourse.Foraccessinformation,pleasee-mailhapbooks@ache.org.

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PA RT I

FINANCIAL MANAGEMENT

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3 Learning Objectives

C H A P T E R 1

FINANCIAL MANAGEMENT IN CONTEXT

After completing this chapter, you should be able to do the following:

➤➤ Understand➤the➤purpose➤of➤healthcare➤organizations

➤➤ Relate➤the➤purpose➤of➤healthcare➤financial➤management➤to➤the➤purpose➤of➤the➤organization

➤➤ Understand➤the➤objectives➤of➤healthcare➤financial➤management

➤➤ Apply➤quality➤assessment➤to➤healthcare➤financial➤management

➤➤ Apply➤organizational➤ethics➤to➤healthcare➤financial➤management

➤➤ Examine➤the➤value➤of➤healthcare➤financial➤management➤to➤the➤management➤functions➤and➤

the➤changing➤face➤of➤healthcare

➤➤ Review➤background➤accounting,➤economics,➤and➤statistics➤information➤(appendixes➤1.1,➤1.2,➤

and➤1.3)