- Depending on your review of the financial statements, suggest a fundamental insight
about the financial health of the company. Speculate on the likely reaction to the financial
statements from various stakeholder groups (employee, investors, shareholders). Provide
support for your rationale
Universal Health Services is a publicly traded company and know for operating acute
care hospitals, surgical and behavioral health centers. The firm also operates in ambulatory
surgery as well as radiation centers. The company is recognized as the largest hospital
management in the United States having more than 240 acute care hospitals and employing more
than 74,000 workers (UHS, 2016). Based in Pennsylvania, the firm is known to register billions
in earnings enabling it to be classified as a top performer. This has also allowed the company to
create franchises in rapidly-growing markets. However, efforts are owed to its management
which works on the principle of integrity to effectively be competent and compassionate. As
such, most of its revenues are gotten from its various departments with acute care hospitals
bringing in 73% of income (UHS, 2016). Nonetheless, it is believed that behavioral health
services bring in more than hospitals due to the high occupancy rate. In other words, it could be
said that the behavioral centers bring in the highest amount of revenue than hospitals. The fact
that health management is large in size, there are bound to be numerous accounting concepts.
Since the financial statement is helpful in monitoring the financial health of a company,
integrity should be applied. Accurate financial information gives the position of the firm in the
market. According to the recorded UHS’S financial information, the company’s income has been
increasing. Nonetheless, the business should make correct entries on the financial statements
especially when recognizing income and expenses. Therefore, it could be said that the financial
health of the company is good but may be complicated with the numerous acquisitions.
However, the higher returns on investments have been attracting investors.
Current Industry Trends
There is no doubt that firms get into business in a bid to make money rather than meeting
the full needs of the market. This is no different from the health care industry where industry
players are focusing on financial aspects instead of providing quality care to their patients (UHS,
2016). More so, what is taught in schools also involve economic aspects as part of its curriculum.
What people fail to apprehend is that quality care attracts more people and eventually increasing
the amount of revenues. At the same time, having more patients and clients raises the spending
of resources raising overall costs (Kaplan & Witkowski, 2014). Besides, hospitals are turning to
technology, and this also increases the overall costs and stakeholders are not left behind (Jena &
Philipson, 2013). In fact, they are behind every planning, developing, and implementation of
hospital projects. Therefore, the trend that hospitals are now following is not new but something
that is rapidly gaining acclamation in the industry. Additionally, the future health direction the
industry players are taking is gaining momentum (Gengler, 2011). All in all, what is more,
important is that lack of quality care in hospitals affects the firm’s financial performance. Sadly
developing sound business practices does not stick with the industry players. Gambling with
people’s health in a bid to reduce hospital costs is undesirable and a recipe for disaster. It is,
therefore, essential for hospitals and health care providers to practice good business ethics that
entails focusing on providing quality care to patients.
- As the CFO, suggest one (1) basic strategy that you might use in order to improve the
financial performance of the organization. Recommend an approach to implementing the
proposed plan. Provide justification for your recommendation.
For above reasons, it is my responsibility as the CFO to ensure that individual and
organizational goals are aligned. In turn, this translates to increased revenues since both
employees and the employers would be satisfied. Better still, there would be increased customer
loyalty and brand image. It is crucial to note that stimulating individual motives will lead to
greater motivation and will to work efficiently. This, therefore, means that core values have to be
instilled as a culture that appreciates everyone’s efforts is cultivated (Baker & Baker, 2013). This
is so because formal business policies will integrate both individual and organizational goals
towards one direction. Still, group objectives should be recognized as essential for success and
continuity of business growth. In turn, the organization’s missions and vision will be met entirely
as the strategies would be linked to goals.
In essence, if personal objectives would be fulfilled, group goals would be easy to attain.
For instance, if UHS decides to align its overall goal of increasing revenue with individual needs
of providing quality care, there would be smooth operations. As such, the strategy is found to be
useful in all types of organizations. While little is being done on performance, the critical focus
is lost. In our case, the focus should be on creating a balance between providing good quality
health care and make more revenues at the same time. In as much, as it is a medical institution, it
operates as a business and requires funding as other firms do. However, even though there is no
harm in wanting more money, it should be made clear that patient health outcomes matter. In
supporting this performance program, the health care provider should ensure they include
customer and business profitability is achieved through proper alignment of goals and strategies.
As a result, there will be reduced costs, increased efficiency, and increased income levels.
Baker, J. J., & Baker, R. W. (2013). Health care finance. Jones & Bartlett Publishers.m
Jena, A. B., & Philipson, T. J. (2013). Endogenous cost-effectiveness analysis and health care
technology adoption. Journal of health economics, 32(1), 172-180.
UHS, (2016). 2014 Annual Report- Universal Health Services.