DNRS 6211 Week 10-11 Assignment 6 Part 2 Summary of Analyses and Interpretation of Results

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Student name

Walden University

DNRS 6211: Finance and Economics in Healthcare Delivery

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Submission Date

Part 2: Summary of Analyses and Interpretation of Results

• Income Statement

FY 2018 the Health Ways Clinic reported a net income of $3,758 being a drastic difference to the loss of $1,307 in FY 2017, which implies a 388 percent increase. Such an optimistic change is a sign of better financial resource management and operation effectiveness. The net patient revenue was also better in terms of collection as it rose by 392,889 to 441,266. Nonetheless, there was a loss in other revenue sources, and it might suggest that they relied on patient revenue (Beauvais et al., 2023). Even with that, the net income has improved, which implies that the clinic is financially stable and can explore new investments and prospects of growth.

• Balance Sheet

The financial growth is supported by the fact that in 2018 versus 2017, total assets have grown by over 5.5 per cent., to 180,088. The growth in the unrestricted funds that act as the source of financial flexibility resulted in the increase of net assets to $30,959. Nonetheless, the cash reserves dropped to 12, 098 to 5,675, which was large enough to question the liquidity in the short term. In case the clinic intends to make new investments, this fall will be to be managed by an intelligent and effective financial planning strategy.

• Financial Ratios

Cost per encounter also reduced to 175.91 out of 180.22 indicating enhanced cost efficiency in the provision of services. There is the necessity of revenue diversification to guarantee the sustainable growth since overall operating revenue per encounter was somewhat lower than last year, decreasing to 179.85 to 176.93. The trend of profitability moved positively since the operating margin became a positive value ranging between -0.21 and 0.58. Other improvements, such as the introduction of Remote Patients Monitoring (RPM) can be used to make more money and higher margins (Thomas et al., 2021). Nonetheless, days cash on hand dropped by 7.0 to 3.2 which implies the decreased capacity of the company to meet the short-term costs and the same became a question of liquidity management.

• Assumptions

The analysis is made under the assumption that the financial stability of the clinic will further increase, and it will be possible to invest strategically. New programs are also thought to improve patient care by lowering the number of physical visits and keeping or growing revenue (Thomas et al., 2021). Also, the sources of funding or reimbursement strategies will be taken into consideration and help sustain new initiatives without having to drain the cash reserves.

• Implications for Healthcare Initiatives

The clinic can consider new healthcare initiatives considering the financial trends but it needs to pay close attention to the liquidity issues. The implementation of new programs such as the RPM program will be able to increase the revenue by engaging more patients and providing more services that are billable (Thomas et al., 2021). It is also possible to increase the cost efficiency by easing the use of face-to-face visits. Nevertheless, external funds, grants, or collaborations will also play a crucial role in avoiding the implementation process without additional cash drainage. The development of financial strategies, which go in hand with the growth opportunities, will enhance the financial wellbeing of the clinic in the long-term as it increases its patient care services.