Financial Management and Accounting - Essay Example

SUNY Down Medical Center For this activity, I selected SUNY Down Medical Center, an "urban medical center", consisted of several academic and research institutions and the University Hospital of Brooklyn. The medical center, hence, provides education, research and patient care services and programs, within what its president called as academic medical center institutional model. The wide range of institutions included in this particular health care organization means that there are diverse sources of funding.

But, nonetheless, the entire organization is privately funded and operates within a conventional framework of raising revenues. In general terms, funding for medical institutions such as SUNY Downstate can come from various sources and that it also depends on the type of services provided. But the main source of income is of course its patrons - those individuals that receive and purchase its services: students, organizations and patients. For example, its academic institution has 1,751 students and 1,049 residents.

The University Hospital of Brooklyn specializes in a comprehensive pediatric care. It serves a tri-state area but in New York City along, there is about a million and a half children who would need medical attention (SUNY 2012). The University Hospital of Brooklyn also derives revenue from its care services, such as inpatient visits, Outpatient visits, ambulatory surgery, emergency room visits, dialysis Procedures, health fairs & health lectures (SUNY 2012). Besides the revenue from the students, patients and other patrons, the institution also relies on the donations and grants from both private and public sector and involves the capability of the staff to secure them.

The federal government has funding obligations to institutions like SUNY Downstate. But such subsidy or grants are not guaranteed especially in the case of a bad state of the economy (Anderson, 2011, p. 241). The staff, hence, has to be creative in finding funding alternative sources. A case in point is Dr. Sheldon Landesman, the assistant dean of clinical education at SUNY Downstate. Dr. Landesman is considered one of the primary movers in securing funding for the institution having repeatedly secured million-dollar grants when he worked at the Department of Medicine as a researcher (Fischer, 2009, p.6). Today, SUNY claims to have about $62 million worth of grant funding for its research centers and laboratories (SUNY 2012).

The discourse on funding highlights the importance of financial information primarily from the point of view of the institution's decision makers as well as other stakeholders such as shareholders, grant agencies, donors, among others. In this respect, SUNY Downstate is not that different from the conventional organization. The rule is that financial information is critical in decision-making process. Cleverly, Cleverly and Song (2010) identified five specific reasons why that is the case. They explained that financial information is important in: 1) evaluating financial condition of the organization; 2) the evaluation of the stewardship of the institution; 3) the assessment of operational efficiency; 4) the assessment of operational effectiveness; and, 5) the determination o the compliance to operational directives and standards (p.5). SUNY Downstate as a private organization has to ensure that financial information is generated, accurate and timely.

The financial information or data generated within the organization are used by a highly diverse group. Of course, there is the case of the management. It informs the decision-making process within the organization. Managers cannot possibly introduce sound, effective and viable initiatives, policies and actions without financial information. For example, without data about the financial structure of the company, its management is unable to determine the correct mix of various types of debts and equity (Gibson, 2010, p.203). Then, there were the other stakeholders such as the investing public, credit grantors, suppliers and so forth.

It is easy to understand, hence, how the goal of financial management in SUNY Downstate is to maximize efficiency, productivity and innovation by making sure that its finances are sound. And this is achieved by proprietary financial management, generating accurate financial data. Like an ordinary enterprise, the medical institution must produce revenues, acquire assets and put those assets to work and that decisions relating to these aspects should be based on sound economic principles. This is now the function of financial management.

It is composed of three major organizational policies, namely, investment, financing and dividend policies (Lee, Lee and Lee 2010, p.1). This financial management is distinguished from accounting fundamentally because it relates to the treatment of funds: how assets are selected according to financial criteria; what assets are best aligned with the organizational objectives (Khan and Jain, p.1.5). Accounting, on the other hand, is simply the generation of financial data for the use of the management and, hence, relates exclusively to decision making.

It can provide input to financial management. References Anderson, B. (2011). Book Alone: Caring for the Vulnerable. Burlington, MA: Jones and Bartlett Publishers. Cleverly, W., Cleverly, J. and Song, P. (2010). Essentials of Health Care Finance. Burlington, MA: Jones and Bartlett Learning.] Fischer, C. (2009). Routine Miracles: Personal Journeys of Patients and Doctors Discovering the Powers of Modern Medicine. New York: Kaplan Publishing. Gibson, C. (2010). Financial Reporting and Analysis: Using Financial Accounting Information.

New York: Cengage Learning. Khan, M. and Jain, P. (2007). Financial Management. New Delhi: Tata McGraw-Hill Publishing Company Ltd. Lee, A., Lee, J. and Lee, C. (2009). Financial Analysis, Planning & Forecasting: Theory and Application. Singapore: World Scientific. SUNY. (2012). Facts at a Glance. SUNY Downstate. Retrieved from http://www.downstate.edu/sunyintro/suny_facts.html.