The Affordable Care Act and Hospital Financial Management

The Affordable Care Act has had a tremendous effect on hospital financial management. For instance, the Act has required an increased amount of evolution in order to meet the expanding needs of consumers. Some of these changes are related to reimbursement, expenditures, and cost of care. Each of these are discussed below:


Reimbursement is important to hospital financial management. Since the Act mandates healthcare coverage for all citizens, it is expected that costs should decrease. However, this is not always the case. The government offers subsidiaries for citizens that qualify and need assistance in paying for healthcare coverage. The Act also established a reimbursement system based on quality of care. Therefore, within hospital financial management, provisions need to be made to increase quality of care in order to increase revenue.


Since it is beneficial to increase quality of care, some hospitals will need to decrease expenditures. This may mean exchanging purchasing and/or buildings for purchasing updated technology or hiring additional staff. In effect, hospital financial management under the Act will involve compromising on expenditures in order to best meet the requirements of the Acts, as well as the expectations of the consumers.

Cost of Care

Cost of care will change as a result of the Act. This is largely due to the changes in reimbursement. Since the Act requires reimbursement to be based on quality of care, rather than a set fee, it is possible that the cost of care may increase. Hospital financial management tactics will involve planning for different scenarios related to cost of care. This is only a small sampling of the  ways that the Affordable Care Act and healthcare financial management are related. To learn more, contact us today.

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