48. The following questions concern the appropriate accounting for a private not-for-profit health care entity. Write complete answers for each of these independent questions. a. What is a third-party payor, and how does the presence of third-party payors impact the financial reporting of a health care entity? b. Jones Hospital and Smith Hospital operate within three miles of each other. Jones is a for-profit business. Smith is a private not-for- profit hospital. In general, how do the accounting rules differ for these two similar organizations? c. A private not-for-profit health care entity charges a group of patients $7 million for various services. They have health coverage through a government program. The program has contracts with the health care entity that provides explicit cost concessions. For that reason the health care entity thinks it has a 40 percent chance of collecting $5 million, a 30 percent chance of collecting $4 million, and a 30 percent chance of collecting $3 million, Describe the financial reporting the health care entity should make for these revenues. d. A private health care entity charges a group of patients $5 million for various services. They are uninsured. The health care Page 915 entity has implicit price concessions that it applies to this portfolio of patients. For that reason, the health care entity thinks it has a 50 percent chance of collecting $1 million, a 30 percent chance of collecting $700,000, and a 20 percent chance of collecting $400,000. Describe the financial reporting the health care entity should make for these revenues. c. In connection with the financial reporting of a private not-for-profit entity, what is charity care? Describe the financial reporting for charity care