Healthcare Facilities and Bad Debt

Healthcare Facilities and Bad Debt
Student Details
6/26/2019

Contents
Introduction......................................................................................................................................3
Bad Debt in HealthCare...................................................................................................................4
Causes of Bad Debt in Healthcare...................................................................................................5
Reluctance of Debtor...................................................................................................................6
Disputable Conditions..................................................................................................................6
Unableness of Debtor...................................................................................................................7
Fraud Debtor................................................................................................................................8
Types of Bad Debt in Healthcare.....................................................................................................8
Primary Bad Debts.......................................................................................................................9
Secondary Bad Debts...................................................................................................................9
Bad debts Trends and Impacts.......................................................................................................10
Recommendation...........................................................................................................................10
Conclusion.....................................................................................................................................12
Bibliography..................................................................................................................................13

Introduction
The sector within the economic system of countries, which aims at providing health care
facilities to its people by charging from them a nominal amount for such facilities, has known as
Healthcare Industry. It is not solely focused on a single unit, infect it is the integration of
multiple units that in combination makes this sector. The units, which provide healthcare
facilities to people near them, are many in numbers and looking forward to saving the lives of
many people. The main aim of these units is to take care of patients however, they also charge a
good amount from them. It depends on the size and scale of operations of that particular
healthcare unit. The charges have accordingly decided and charged from individuals (Bazzoli,
2015).
The facilities that these health care units are determined to provide can be curative,
rehabilitative, preventive and palliative in nature. The health care units sometimes can be
nonprofit organizations also. The aim of these nonprofit organizations to treat their patients with
the amount of charity they get from others. The industry of healthcare is the mixture of multiple
hospitals and other health care units from which the level of their operations can vary drastically
(ILM, 2019). The main aim of these health care units is to provide various health-related
services to various patients; however, this can only be possible for most of them by taking the
required amount as a charge from those patients they serve. Sometimes when patients refuse to
or not capable of paying the full amount or partial amount to hospital, then this health care unit
goes in such bad debt conditions. The detailed exploitation of bad debts in a hospital care setting
is going to be analyzed in this project with the help of its various elements (Chandra, 2017).

Bad Debt in HealthCare
Healthcare units have established for providing healthcare facilities to different
individuals; however, their main goal can only be achieved by charging the necessary amount
from those individuals. When the patients are not able to make payments for the treatment they
get then the hospital goes into bad debt conditions. This situation where the patient makes a
partial payment or no payment at all then in this condition the bad debt situations for the hospital
arises which needed to be written off as soon as possible (Dranove & Garthwaite, 2016).
This is a loss condition for the hospital and for that, the hospital needed to make provisions
before only, to recover them from loss soon. It is advised to all organizations and businesses, in
this case, various healthcare units that, if they are dealing in things to serve customers then they
probability can face the conditions of debt in present past or future. It is the tendency as well as
economic factors present all around human beings, which allows them to demand more than they
can afford. Due to this, the customers or in this case patients sometimes would not able to pay for
the services they get from the respective institution. This situation creates the circumstances of
bad debt. These circumstances needed to be avoided by the organizations on a higher rate.
Debt is said to be a sum of money that is due or owned by some other party. It is a term,
which is used in accounts context and is considered among important terms of accounting. When
one person owes some amount to another person, then he is known as debtor and the amount for
another person is known as debt. It is important to recover the debt amount as soon as possible;
however, in many conditions, it becomes difficult to recover that debt amount (ASANTEY &
TENGEY, 2014). It becomes difficult because the condition of the debtor may become poor or
they may not able to pay such a high amount within the required period. The penalties can help