Gapenski’s Healthcare Finance: An Introduction to Accounting and Financial Management, 7th edition

Gapenski’s Healthcare Finance: An Introduction to Accounting and Financial Management explores how healthcare organizations manage financial operations to optimally provide patient care. This significantly revised edition of one of Health Administration Press’s best-selling books introduces the key foundational elements of healthcare finance, including both accounting and financial management. Numerous examples throughout showcase how healthcare finance is practiced in a variety of organizations, including hospitals, medical practices, clinics, home health agencies, nursing homes, and managed care organizations. Authors Kristin L. Reiter and Paula H. Song emphasize not only financial theory and principles but also practical tools healthcare managers can use to make the crucial decisions that promote the financial well-being of their organization. Gapenski’s Healthcare Finance examines the current financial environment in which providers operate, with an emphasis on health system design, healthcare insurance, and reimbursement methodologies. Dates, exhibits, references, and resources have been updated throughout. All examples and financial statements reflect current accounting and reporting standards. In a dynamic environment, healthcare leaders need to practice good financial decision-making for the health of their patients and the financial stability of their organization. From this book, current and future managers will understand the finance problems provider organizations face and how best to solve them.

PREFACE

The beginnings of Healthcare Finance: An Introduction to Accounting and Financial Management trace back more than 20 years. At that time, there was a need to make available material for courses in traditional, nontraditional, and clinician-oriented master of health administration (MHA) programs in which students did not have a formal educational background in finance-related topics. Finance courses in such programs require a book that provides basic information on foundational topics. Furthermore, these courses often are part of programs that contain just one healthcare finance course, so the course must cover both accounting and financial management. Some texts that were published at that time were strong in accounting, and others were strong in financial management. However, none gave equal emphasis to both components of healthcare finance, giving rise to the first edition of this book.

Concept of the Book

The overall concept of this book has not changed since the first edition: to create a textbook that introduces students to the most important principles and applications of healthcare finance, with roughly equal coverage of accounting and financial management. Furthermore, because the book is intended for use primarily in health services administration programs, in which students are trained for professional positions within healthcare provider organizations, its focus is on healthcare finance as it is practiced in such organizations. Thus, the examples in the book are based on such organizations as hospitals, medical practices, clinics, home health agencies, nursing homes, and managed care organizations.

Another consideration in writing the book is that most readers would be seeing the material for the first time, so it is important that the material be explained as clearly and succinctly as possible. We have tried hard to create a book that readers will find user-friendly—one that they will enjoy reading and can learn from on their own. If students don’t find a book interesting, understandable, and useful, they won’t read it.

The book begins with an introduction to healthcare finance and a description of the current financial environment in which providers operate, with emphasis on health system design, healthcare insurance, and reimbursement methodologies. From there, it takes students through the basics of financial and managerial accounting. Here, our goal is not to turn generalist managers into accountants but to present those accounting concepts that are most critical to managerial decision-making. The book then discusses the foundations of financial management and demonstrates how healthcare managers can apply financial management principles to help make better decisions—where better is defined as decisions that promote the financial well-being of the organization.