In Module 1, the first required assignment asked you to examine the course and relate it to a current, real-world event or recent news story. Based on what you have learned in this course since Module One, reflect on how your answers would change now that you have gained new knowledge. Return to your initial assignment and directly connect the content of your responses to the theories and material of this course. Additionally, based on what you learned in this course, provide some strategies that would address the issues described in the real-world event or recent news story you chose. For example, if you chose a recent story about how high school attendance rates have diminished in the past decade, provide several strategies for addressing that issue based on what you directly learned in this course. Submit a final assignment of 1000 words that synthesizes all these points.
Module 1: Real World Event
The delivery of health care is undergoing many obligatory changes, and the health insurance community must be prepared to comply with the new regulations. The implementation of the Patient Protection and Affordable Care Act (PPACA) or Obama care, the cost containment with emphasis on quality, and transparency are foremost challenges to the health insurance community.
Cost containment is going to be paramount to the health insurance community. The use of utilization management and changing the way physicians are paid are two ways to control cost. Understanding cost drivers in healthcare will be needed in order to reduce the overall rate of rise in healthcare cost. There are several area in the course syllabus and table of content that will help me gain a better understanding on how to evaluate and help with containing cost and they are job cost, cost allocation, cost of quality and short term business decisions.
Understanding job costs, and cost allocation will help reduce overall administrative cost by identifying areas within the company that are over or under allocated toimprove efficiency and reduce cost. Looking specifically at the utilization management area, job cost and the potential savings from managing high end procedures/test will help show return on investmentand help guide decisions in staffing as well as which procedures or test to focus on.
As we enter into the 2nd year of Obama care, there are many short term business decisions that will have to be made, some of whichinclude product design, cost sharing, cost of the product, profitability versus membership. All of these need to be weighed against the cost, risk, and strategic goals of the company.
The items that lest interests me
The real world event article that I chose was concerning Amazon’s cash flow. The statement of cash flow is one of the main financial statements of a business. Cash flow or statement of cash flow is the net change in company cash position from one period to the next (Cash Flow Definition). It organizes and reports the cash generated by operating, investing, and financing activities as well as supplemental information. However, the statement of cash flow is prepared under the accrual basis of accounting. In reality, income may not have been collected and expenses may not have been paid.
The statement of cash flow and how it is affected by various factors is emphasized by an article posted on Forbes.com. The article presentsissues concerning Amazon’s cash flow and reasons why this company’s cash flow might not be “king”.Three reasons given to explain why Amazon’s cash flow statements may be misleading are: depreciation, stock based compensation, and capital lease. These factors help inflate the cash flow statement and give the appearance that Amazon is making profits when Amazon is actually “borrowing from shareholders and deferring payments in order to mask the fact that it is losing money” (Trainer). The article relates to this course because it demonstrates what cash flow statements are, the components that make up the statement, and the importance of the statement.
I believe the old adage that “cash is king” as expressed in cash flow statements is an important piece of information when looking at a company either as an investor or part of management.Companies that have positive cash flow statements are generally in a more stable position with better buying power, and greater protection from loan default. However, knowing the components that make up cash flow statement as well as the advantages / disadvantages of this data is important. I feel that this article applies to this course in helping understand the potential risk of not fully realizing what is behind the numbers.