Factors that set the healthcare industry regarding accounts

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Identify the three factors that set the healthcare industry regarding accounts receivable Explain the ways in which trends within Medicare, Medicaid, and third-party payers affect working capital and the cost elements associated with the revenue cycle

For the purpose of finance and management, the healthcare industry is typically divided into several areas. As a basic framework for defining the sector, the United Nations International Standard Industrial Classification (ISIC) categorizes the healthcare industry as generally consisting of:

Hospital activities;, Medical and dental practice activities; ,Other human health activities This third class involves activities of, or under the supervision of, nurses, midwives, physiotherapists, scientific or diagnostic laboratories, pathology clinics, residential health facilities, or other allied health professions, e.g. in the field of optometry, hydrotherapy, medical massage, yoga therapy, music therapy, occupational therapy, speech therapy, chiropody, homeopathy, chiropractic, acupuncture, etc.[6]

The Global Industry Classification Standard and the Industry Classification Benchmark further distinguish the industry as two main groups:

  1. healthcare equipment and services; and
  2. pharmaceuticals, biotechnology and related life sciences.

The healthcare equipment and services group consists of companies and entities that provide medical equipment, medical supplies, and healthcare services, such as hospitals, home healthcare providers, and nursing homes. The latter listed industry group includes companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific services.[7]

Other approaches to defining the scope of the healthcare industry tend to adopt a broader definition, also including other key actions related to health, such as education and training of health professionals, regulation and management of health services delivery, provision of traditional and complementary medicines, and administration of health insurance.[8]