Healthcare accounting vs. healthcare finance: Ins and outs of the health financial system

Healthcare organizations can’t run without capable and dedicated professionals to keep track of their accounting and finances. Whether overseeing an institution's day-to-day accounts or the overall financial management guiding future operations and policies, individuals who work in healthcare accounting and finance have the opportunity to become healthcare leaders who shape the future of healthcare and improve the lives of both patients and care providers. 

Accounting vs. finance in healthcare — how do they differ?

Accounting and finance each contribute to healthcare organizations’ financial well-being. While some duties and concerns overlap — making coordination and cooperation between the two important for success — the roles and responsibilities of individuals working in healthcare accounting and finance are different.

Accounting

Healthcare accountants give an organization a clear picture of its position and financial well-being. To paint that picture, accountants manage the technical details of an organization’s finances through documents such as statements and audits. By recording and keeping track of financial information that affects an organization’s assets, accountants can provide executive leadership with the information to make important decisions. 

Healthcare accountants use evaluation, planning, and knowledge of taxes and regulations to help make plans for the future. Doing so takes organization and great attention to detail to make sure they don’t overlook anything. With foresight, accountants can help an organization keep up-to-date with trends or recover from financial difficulties, playing an essential role in the healthcare system and ensuring an organization has the funding it needs to provide the best care to patients. 

Finance               

Financial managers in healthcare work in tandem with accountants but often have an overarching role, making decisions based on an organization’s current financial position. Healthcare finance on a whole concerns how society consumes and pays for healthcare services, managing the risks and rewards of different financial strategies and implementing plans that meet tax and budget requirements. 

Without accounting, financial managers would not have a clear picture of the financial position and well-being of healthcare organizations or the overall healthcare system. Using that information, professionals in healthcare finance are able to make decisions in an organization’s best interests, forecasting trends and adapting budgets to manage risk, protect tax status, and invest in the future. These decisions influence long-term spending and dictate how we consume and pay for healthcare services.

Roles and responsibilities in healthcare accounting and finance

The duties and best practices for professionals in accounting versus finance are different. As such, graduates with an MBA in Healthcare work in a variety of organizations and settings. For many of those in healthcare accounting, the goal is to achieve a managerial or supervisory role in a hospital or healthcare organization, directing the day-to-day operations of an accounting department, which can include:

Between the information gathered by accountants and the analysis and evaluation done by financial managers, organizations are able to make informed decisions and plan for the future. By earning an advanced degree in healthcare business administration, graduates build the foundational knowledge, skills, and understanding of financial theory to guide those decisions and best practices in the healthcare system.   

Healthcare accounting and finance salary outlook

Professionals with a background in accounting and finance can play a variety of different roles in a healthcare organization or the larger system overall. According to PayScale, graduates with a Master of Business Administration in Healthcare earned a median annual salary of approximately $84,000 as of September 2021, with compensation varying based on title, position, and experience. 

For those interested in transitioning into medical and health services management, future prospects are positive. As older generations retire and the need to care for them increases, many healthcare professions are seeing faster-than-average job growth. The U.S. Bureau of Labor Statistics projects the number of jobs for health services managers, who earned a median annual salary of $104,280 in 2020, to increase by 32% between 2020 and 2030. With an advanced degree such as an MBA, graduates have the potential to reach their professional goals and fulfill the need for management in healthcare.

Plan for the future with a career in healthcare accounting and finance 

The way we see, plan for, and pay for healthcare comes down to accounting and the financial decisions that guide and shape our healthcare system. From one organization to the next, healthcare accountants keep track of the well-being of each institution, and financial managers make influential decisions based on their information. Together, these professionals allow organizations to develop strategies that improve outcomes and benefit communities. 

To gain a solid foundation in the duties, best practices, and regulations guiding the financial system, students enroll in programs such as the online Master of Business Administration in Healthcare from Northern Arizona University in partnership with OpusVi. With its affordable tuition, online coursework, and fast-track option, NAU’s program offers students the flexibility to achieve a work-life balance while attending school. 

Making decisions for medical organizations is never simple, and it requires a solid foundational knowledge of the medical system, as well as accounting and finance. By pursuing an advanced degree such as an MBA in Healthcare, graduate students can gain the knowledge required to take on new and challenging roles in medical financial management. For those looking to bolster their current careers or begin a new one, an MBA may be the right step to reach their professional goals. 

Sources:

• ACHE, “Introduction to Healthcare Finance”
• Board Effect, “Objectives of Financial Management in Healthcare”
• MGMA, “Critical Accounting and Financial Concepts for Healthcare Leaders"
• National Conference of State Legislatures, “Health Finance Issues”
• PayScale, Master of Business Administration (MBA) Healthcare Administration Degree
• Richter, “Healthcare Organization Financial Statements Best Practices”
• U.S. Bureau of Labor Statistics, Medical and Health Services Managers
• World Health Organization, Health Financing