Northwestern Memorial HealthCare's "Consolidated Financial Report"

Financial Analysis
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Managers at all levels need to understand finance fundamentals, especially in a world where financial realities influence positive healthcare outcomes. Hospital managers' responsibility can be summarized into the four C's: costs, cash, capital, and control. The measurements and implementation of policies to minimize cost are critical to the smooth operation of healthcare facilities. Hospitals require licensing from the state by undergoing inspection s for compliance with state regulations. Consequently, they are accredited by The Joint Commission, a voluntary process intended to maintain high care standards. Therefore, hospitals need to manage their cost to achieve compliance and gain eligibility for participation in the Medicare and Medicaid programs. This essay analyzes Northwestern Memorial HealthCare's financial position to understand the importance of financial analysis better.
The main need for financial analysis is an estimation of cost, profitability planning, and budgeting. Healthcare facilities need to manage their cash and supply inventories. Having developed infrastructure will enable facilities to collect money for services rendered effectively. Therefore, it is the chief financial officer's responsibility (CFO) to facilitate operational effectiveness and cost reduction. In addition to cutting costs, financial analysis can help an organization raise funds to support operations. Decisions need to be made regarding the long-term and short-term debt approach of the organization. Consequently, senior managers must decide on the use of leases versus other conventional methods of financing.
The future of an institution largely depends on the efficiency of capital investment decisions. Financial analysis helps managers make decisions on new facilities such as land, buildings, and equipment. Capital investments rely on an institution's ability to manage its finances by cutting costs and raising funds. Consequently, enough funds are available to help implement strategic decisions that guarantee an institution's financial future.
Healthcare organizations can benefit from an effective financial analysis in their contract management. Health organizations need to sign, negotiate and monitor contracts between them and health insurers. Internal operations can be affected by a failure in contract negotiations; therefore, managers need to go over every possible loophole to avoid losses. Finally, a well-run institution makes it easy to do financial reporting. Businesses need to report and record financial statements to make outsiders aware of the current financial status and operations results. In the medical world, the government is interested in knowing how the respective hospitals utilize money allocated to healthcare. The financial status of a hospital influences patients' perception and confidence regarding the institution's ability to provide quality care and private information security.
A strategic plan is a process of identifying where the company needs to go and coming up with a plan to achieve that. Financial planning is at the center of determining whether the goals will be achieved CITATION Wan16 \l 1033 (Wang & Zhou, 2016). Healthcare world...