Recent turmoil in the capital markets underscored for hospital leaders the negative impact of various liability-side risks. What are several types of financial risks that a health care organization could take in the course of operations? Cite at least two outside resources.
Requirements: 200 words
Essentials of Health Care Finance
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Burlington, MA: Jones & Bartlett Learning. ISBN-13: 9781284094633
Answer preview
organizations give their clients credit but default to pay. Eventually, this makes the health facilities lack funds to facilitate the payment of bills. Further, the operational risks emerge when the daily business activities slow down due to inadequate internal processes and external events, such as fraud and filed lawsuits on negligence and medical errors. For instance, health professionals in the accounts department may falsify a diagnosis, making a patient pay for surgery and other medical procedures as advised (Byrd et al., 2013). However, upon realizing that the diagnosis was false from second opinion tests, the patient files a lawsuit, leading to substantial lawsuit costs for the health facility (Byrd et al., 2013). Further, liquidity risks are prevalent if the health facility fails to meet the short-term obligations for its debt. The organization may fail to convert an asset to cash due to the inefficiencies in the market. Notably, the covid-19 pandemic has affected the market with isolation and stay-at-home measures. Hence, the inability to adapt to the changes progressively has presented challenges for businesses to stand out in the market.
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