BestCare Health Maintenance Organization (HMO) Net Working Capital
Totals current assets- total current liabilities $3,945,000-$3,456,000=$489,000
BestCare Health Maintenance Organization (HMO) Debt ratio
Total debt (liabilities) / total assets
$7,751/$9,869=0.79=79%
Balance sheet lists assets, liabilities and owner’s equity. The assets listed on the balance sheet are acquired either by debt (liabilities) or equity. “Companies that use more debt than equity to finance assets have a high leverage ratio and an aggressive capital structure. A company that pays for assets with more equity than debt has a low leverage ratio and a conservative capital structure. That said, a high leverage ratio and/or an aggressive capital structure can also lead
…show more content…
Net working capital represents organization’s operating liquidity. In order to compute the net working capital, total current assets are divided from total current liabilities. When there is sufficient excess of current assets over current liabilities, an organization might be considered sufficiently liquid. Another ratio that helps in assessing the operating liquidity of as company is a current ratio. The ratio is calculated by dividing the total current assets over total current liabilities. When the current ratio is high, the organization has enough of current assets to pay for the liabilities. Yet, another mean of calculating the organization’s debt-paying ability is the debt ratio. To calculate the ratio, total liabilities are divided by total assets. The computation gives information on what proportion of organization’s assets is financed by a debt, and what is the entity’s ability to pay for current and long term liabilities. Lower debt ratio is better, because the low liabilities require low debt payments. To be able to lend money, an organization’s current ratio has to fall above a certain level, also the debt ratio cannot rise above a certain threshold. Otherwise, the entity will not be able to lend money or will have to pay high penalties. The following steps can be undertaken by a company to keep the debt ratio within normal
Membership Services (MSD) at Kaiser Permanente used to be a modest department of sixty staff. However, over the past few years the department has doubled in size, creating minor departmental reorganization. In addition the increase of departmental staffing, several challenges became apparent. The changes included primary job function, as well as the introduction of new network system software which slowed down the processes of other departments. These departments included Claims (who pay the bills for service providers outside of the Kaiser Permanente network), and Patient Business Services (who send invoices to members for services received within Kaiser Permanente). Due to the unforeseen challenges created by the system upgrade, it was decided that MSD would process the calls for both of the affected departments. Unfortunately, this created a catastrophic event of MSD receiving numerous phone calls from upset members—who had received bills a year after the service had been provided. The average Monday call volume had risen from 1,800 to 2,600 calls per day. The average handling time for each phone call had risen as well—from an acceptable standard of 5.6 minutes to an unfavorable 7.2 minutes. The department continued to be kept inundated with these types of calls for the two years that these changes have been effect.
Integrated Managed Care Organization- The organization is properly aligned for the primary driver being cost cutting services. Since all entities within the organization are responsible and affected by any expenses endured on any entity being unfavorable or favorable, the foundation serves as a primary motivator to reduce costs at all levels. This alignment eliminates any financial gains from driving high utilization of services or higher intensity services within the organization. Ultimately, this system allows the physician medical group to drive patient care, being responsible for the clinical care decisions as opposed to health plan making those decisions as designed in other organizations. This is the preferable model for Medicaid
WellStar Health Systems is currently the preeminent and largest health care provider in Metro Atlanta. WellStar Health Systems is a not-for-profit institution that is composed of 5 hospitals and an abundance of physician groups. Physician specialty groups included within WellStar are: ENT, Psychiatry, Endocrinology, Pulmonary Medicine, Infectious Disease, General Surgery, Rehabilitation, Pathology, and Rheumatology. WellStar’s organizational design is composed of internal and external factors that define the organization’s size, organizational structure, and processes. Internal and external factors are the basis for influencing managerial conclusions in decision-making. These factors vary from organization to organization and are the rationale for understanding WellStar’s strengths, weaknesses, opportunities, and threats. Understanding these variables is a necessity for the sake of WellStar’s survival
Health Care workers are constantly faced with legal and ethical issues every day during the course of their work. It is important that the health care workers have a clear understanding of these legal and ethical issues that they will face (1). In the case study analysed key legal and ethical issues arise during the initial decision-making of the incident, when the second ambulance crew arrived, throughout the treatment and during the transfer of patient to the hospital. The ethical issues in this case can be described as what the paramedic believes is the right thing to do for the patient and the legal issues control what the law describes that the paramedic should do in this situation (2, 3). It is therefore important that paramedics also
Finding the perfect capital structure in terms of risk and reward can ensure a company meets shareholder expectations and protects a firm in times of recession. Capital structure refers to how a business puts its money to “work”. The two forms of capital structure are equity capital and debt capital. Both have their benefits and limitations. Striking that perfect balance between the two can mean the difference between thriving versus trying to survive.
The balance sheet provides a snapshot of a firm’s financial position at a specific point in time, by using the company’s Asset and Debit Equity.
A managed care organization is a collection of clinics, doctors, hospitals, pharmacies and other healthcare providers who come together to offer health care to persons who are sign up for the services. In many cases, managed care organizations operate and are referred to as networks of health care providers. Managed care organizations are comprised of health care experts from different fields who come under an agreement to offer health care services to members. Once a member signs up, all their heath care needs are covered by the managed care organizations. Access to care outside the organization is restricted. Members under managed care organizations are usually assigned a primary care physician (PCP) who is the primary care giver for the member. The PCP is tasked with analyzing a member’s health problem before referring them to other sections of the managed care organization. Managed Care Organizations are usually well coordinated to meet the needs of members who have registered under their banner.
There is an old saying in business that if something isn’t broken then don’t fix it, but that is very far from the truth. Sometimes when doing business managers get comfortable with their business partners, and do not take the time and effort to look at what the competition has to offer. Not taking the time to look at the competition could mean a few things, one that the manager is very loyal to their business partner, which sometimes happens in character base trust, or the manager is just to lazy to do the leg work to find the best prices for his company. Not allowing competitors to compete takes away from a business ability to maximize profit, it allows one business to set prices and not meet different competitive demands. Another mistake company’s make is having someone from outside a department make decisions that someone from that particular department should be making. Most of the time the outside individual does not have adequate experience and training to make the best decision in the interest of the company.
A company's current ratio measures its ability to pay its current debts, defined as those due within one year. It does so by comparing the company's current liabilities with its current assets, meaning those that can be converted to cash within a year or less.
HealthCo As a result of increasing competition and a decrease in membership numbers is attempting to improve staff performance in order to attract new customers. However management 's “top heavy” strategy combined with its resistance to change and views on different employees and managers in the workplace is damaging day to day operations. This damage is seen to be unappealing towards customers as many become enraged, “aggressive and abusive” as many leave the organisation. For example the staff came into work one morning and discovered that “computers and rates had been changed” with no warning given. This ill prepared approach leaves little time for staff to prepare, limiting the customer experience resulting in the decrease of members. If no action is taken to address this issue than HealthCo’s image will continue to become damaged as they lose customers to competitors. Communication goals should be set in order to assist management in the process of learning how to communicate effectively towards staff as well
BestMed Medical Supplies Corporation is looking for an alternative communication tool in which all 500 employees have a way to communicate more efficiently. Having a unified communication system could greatly improve their company. Examples could include customer relations, inventory, and scheduling. Currently the team is using instant messenger, emails, texts and call on their person cell phones.
The Claims Department has been having a lot of Volume in the amount of work has is need to be done. I as your Human Resource Manager am concerned about our clients we protect though our Health Insurance are not getting the Professional assistance that they have come to expect of our Company. I would like to get the Claims Department Organized and working smoother than it is. I have come to you with this Problem with a solution to this problem.
Many researchers have studied financial relations as a part of working capital management; but, very few of them have argued the working capital policies in specific. Studies by Gupta (1969) and Gupta and Huefner (1972) studied the differences in financial ratio averages between industries. The results of both the studies were that variances do exist in mean profitability, operation, liability to equity and liquidity ratios among industry
WORKING CAPITAL MANAGEMENT “More business fails for lack of cash than for want of profit” Efficient management of working capital is one of the pre-conditions for the success of an enterprise. Efficient management of working capital means management of various components of working capital in such a way that an adequate amount of working capital is maintained for smooth running of a firm and for fulfillment of twin objectives of liquidity and profitability. An inadequate amount of working capital impairs the firm’s liquidity. Holding of excess working capital results in the reduction of the profitability. But the proper estimation of working capital actually required, is a difficult task for the management because the amount of working capital varies across firms over the periods depending upon the nature of business, production cycle, credit policy, availability of raw material, etc.
In order to fully understand the company¡¦s financial position a financial manager must consider the amount of net working capital available. The net working capital is the difference between current assets and current liabilities. Companies normally have a positive net working capital. The components of working capital change continually within the cycle of operations. (Brealey, 2001) Therefore, an effective manager will monitor the cash conversion periods to determine the length of the production process. The longer the process, the longer the company¡¦s money will be tied up in the process. The two elements in the business cycle that normally absorb the most cash are inventory and receivables. The main sources of cash are payables and equity or loans. Speeding up the working capital cycle will generate more cash for the company. www.planware.org This management of working capital will allow the company to maximize its use of existing cash flows as well as leverage additional sources of working capital.