Health Finance a Comparison of Research Paper

All three organizations receive money from sources other than direct patient revenue, and are in fact dependent on these alternative sources of revenue for continuing operations. Government payment for services is a major source of revenue for the Northern Illinois Medical Center, and investments make up at least some amount of revenue for all three organizations. The single largest line item of revenue other than direct patient revenue for Saskasegawa Memorial Hospital is the sale of assets, however, and though there are additional assets that the organization can sell this cannot be kept up in perpetuity; either other investments need to be made to increase revenue or operating expenses need to somehow be reduced in order to ensure the long-term viability of this organization. The sale of assets and investments also contributed to Kindred Hospital's revenue to a degree that will almost certainly not be sustainable in the long-term.

There are some obvious difference in the structure of non-profit and for profit organizations that have a definite impact on how these organizations operate and on their profitability and overall cash flow. The balance sheets and other records for the Northern Illinois Medical Center are far simpler than for either of the other two organizations; though they are held accountable for accurate and comprehensive reporting of assets, liabilities, revenues and expenditures, the organization appears to be engaged in fewer overall financial interactions and is certainly involved in fewer broad classes of such transactions. In addition, while almost all healthcare organizations serve Medicare and Medicaid patients and bill the appropriate government offices for these services, such transactions make up the vast majority of Northern Illinois' revenue stream, meaning there is simply less administrative and financial work necessary for the company to complete. This is a definite factor in its apparently simplified structure.

Kindred Hospital, which is a for-profit institution, is also a publicly traded company (as evidenced by the shareholder data and stock information included in its financial and accounting statements. This leads to many more complications in the structure and operation of this organization, including a responsiveness to shareholder desires in its operations and a maintenance of more complete and more complex tax records. Administration and accounting thus become much larger tasks in a for-profit organization such as Kindred, and the direct provision of medical services necessarily plays a lesser role in the overall running of the organization. Though Sakasegawa is not identified as a for-profit or non-profit organization, a comparison of its financial statements to those of Kindred show many similarities that suggest a similar structure and a for-profit status of this hospital.