Discussion: Healthcare Innovation & Financial Statements Analysis

This discussion board post analyzes the relationship between healthcare innovation and financial performance, drawing from a research article that explores the impact of different types of innovation on hospital operational performance. The post examines how the acquisition of innovative resources affects a healthcare organization's financial statements, including the balance sheet, profit and loss statement, and statement of cash flows. It details the short-term and long-term effects of these acquisitions on each statement's components, such as assets, liabilities, and net income. Furthermore, the post suggests effective financing strategies for healthcare organizations to acquire innovative resources, emphasizing partnerships with donation agencies and government funding to overcome the high costs associated with innovation. The post concludes by highlighting the importance of innovation in achieving competitive advantages and improving patient care within the healthcare sector.

https://www.tandfonline.com/doi/abs/10.1080/14479338.2017.1293489
Summary of the article
In summary, the article stipulates that innovativeness has helped many organizations to
achieve competitive advantage in the market by improving the performance of these
organizations. That is why today, healthcare institutions are experiencing an increased need for
innovation that will enable them to gain competitive advantage by improving performance and
see patients offered adequate and quality care. However, isolating and measuring the impact of
technological innovation in healthcare and its relationship with performance in healthcare has
proved to be a challenge. That is why this research article aimed to determine if there is a
relationship between hospital performances to several types of innovation in healthcare by
conducting comparative tests on the existing statistical differences of the hospitals under study.
The results of this article established that there is a relationship between organizational
innovation and process and service innovation which influence operational performance in the
hospitals.
The impact of acquisition of innovative resources to the financial statements
By definition, a balance sheet of an organization will report the accounting of that
organization regarding the assets, equity, and liabilities (Groves et al., 2016). Acquiring
innovative resources will have a different impact on the components of the balance sheet. This is
so because assets are resources of economic value that an organization has. Since innovative
resources improve the organization’s performance which results in the organization gaining a
competitive advantage in the market, its justifiable to say that innovative resources have
economic value in the organization. Therefore, acquiring innovative resources will have a
positive impact on the assets of the organization by increasing the assets of the organization. This
will also increase the assets owned by the organization in the name of equity (Price & John,

2014). However, because an organization will have financial obligations that it needs to pay to
those entities that it acquired innovative resources from, the organization will have increased
liabilities.
Profit and loss statement subtracts the expenses of an organization from its revenues to
get the net income of an organization (Ostrovsky & Barnett, 2014). Immediately after acquiring
innovative resources, the organization’s net income will reduce since an organization has spent a
lot of money on acquiring these innovative resources. However, after some time, the net income
of the organization will increase since the innovative resources will improve performance and as
a result, an organization will gain a competitive advantage in the market.
The statement of cash flows shows the changes in cash flow over a specific period of
time and it includes cash receipts and cash payments (Page, 2014). In acquiring innovative
resources, most organizations will prefer liquid cash over cash payments. This means that an
organization will have cash receipts that it used to facilitate the purchase of these innovative
resources.
How healthcare organizations can finance acquisitions of innovative resources
The best way healthcare innovation can finance for innovation the acquisition of
innovative resources is by partnering with Donna agencies and also seeking funding from the
government. This is so because innovations are very expensive and a healthcare organization on
its own may not manage to acquire necessary innovative resources. However, with donations
from relevant companies such as Anschutz Foundation and funding from the government will
help boost the financial power of the company in acquiring these innovative resources.
Reference

Groves, P., Kayyali, B., Knott, D., & Kuiken, S. V. (2016). The'big data'revolution in healthcare:
Accelerating value and innovation.
Ostrovsky, A., & Barnett, M. (2014, March). Accelerating change: fostering innovation in
healthcare delivery at academic medical centers. In Healthcare (Vol. 2, No. 1, pp. 9-13).
Elsevier.
Page, T. (2014). Notions of innovation in healthcare services and products.
Price, C. P., & John, A. S. (2014). Innovation in healthcare. The challenge for laboratory
medicine. Clinica chimica acta, 427, 71-78.