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Financial Management for Health Care Administrators.

Financial Management for Health Care Administrators. Familiarity with the language and concepts of financial management is essential for physician executives. This book aims at those working in health care administration who lack any background in finance and is intended to provide an introduction to the field.

The first third of the book provides an explanation of the basic terminology and ideas employed in finance and accounting. The function of financial management, budget preparation and forecasting, and fund accounting and formal definitions of terms such as "equity," "liability," and "asset" are covered. The next two chapters, which deal with revenue sources and working capital, further develop this material. The remainder of the book attempts to illustrate the application of this knowledge to the problems of setting rates, cost analysis, managing accounts receivable, and controlling inventory. Two appendices explore the use of time series analysis and linear programming to make volume projections.

Unfortunately, a nearly impenetrable writing style and many typographical errors severely limit the worth of this book. For example, one paragraph dealing with the aging of accounts receivable computes to a Gunning Fog Index of 23. In comparison, a typical life insurance policy produces a figure of only 13. Errors destroy the usefulness of the appendix on linear programming. The key illustration contains an incorrect value for one of the coefficients. There is also a simple arithmetic mistake made and carried through the rest of the sample problem. Current computer spread sheets have the capability to perform linear optimizations. It would have been helpful to illustrate the solution using this method, which is available to many individuals.

This is a reasonably concise treatment of vital subject matter, and the level of treatment is appropriate for the physician executive. However, dense prose and many misprints hurt the book. I look forward to a better-edited next edition.-
COPYRIGHT 1991 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Small, Bruce M.
Publication:Physician Executive
Article Type:Book Review
Date:Mar 1, 1991
Previous Article:The Quest for Quality.
Next Article:Greater future role seen for physicians, physician executives.

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