I just need #2 Answer

The 10-K filing of Universal Health Services, Inc. describes the mix of revenue sources, as depicted in Table 5.3-3.

1.How does this revenue mix compare with the revenue blend of the not-for-profit entity, St. Jude Children's Research Hospital (ALSAC)? Access the latest SEC filing and compare the reported revenue mix; has it changed?

2.What does that imply as to the strategies of investor-owned hospitals in managing risk and ensuring adequate capital relative to not-for-profit entities? An opportunity exists to explore the greater social and political questions that are frequently debated about the compatibility of profit-oriented entities and quality of health care, relative to not-for-profit entities. As background, identify what the latest SEC filings report concerning charity care

. Table 5.3-3. Patient Revenue Mix

PERCENTAGE OF NET PATIENT REVENUES 2000 1999 1998 1997 1996 Third Party Payors

Medicare. 32.3% 33.5% 34.3% 35.6% 35.6%

Medicaid. 11.5% 12.6% 11.3% 14.5% 15.3%

Managed Care (HMOs and PPOs) 34.5% 31.5% 27.2% 19.1% N/A

Other Sources 21.7% 22.4% 27.2% 30.8% 49.1%

Total. 100% 100% 100% 100% 100%

N/A-Not available (Source: 10-K filed 3/28/2001)

Directed Self-Study Access the 10-Q (from http://sec.gov) for the quarterly period ended June 30, 2006 and explain how Hurricane Katrina affected Universal Health Services. The same 10-Q reports on a funding commitment the company has made to the alma mater of the Chairman of the Board of Directors and Chief Executive Officer. Describe the disclosure and explain why the event is an Other Related Party Transaction. [Download the 10-Q in text format and apply the Find capability in your word processor. Also access FARS and identify the guidance relevant to each event.]

Health Insurance, Public Policy, and Backdating

A key factor in the health care industry is health insurance. Public policy has debated universal health care, changes to governmental programs such as Medicare, adjustment of tax policy regarding employers' and employees' deduction for premiums, and alternative approaches to this sector of the economy. State and local governments, under a new accounting rule, have recently estimated their total retiree health bill to be about $1.1 trillion. Over the past decade, some governmental units used pension funds to help pay for double-digit growth in health care for retired public workers. Explain how accounting interacts with public policy. Use FARS as a resource, according particular attention to FAS 158.

Health insurer UnitedHealth has been the focus of media coverage involving what is known as the options backdating scandal. UnitedHealth's internal probe estimates its past decade exposure at half a billion dollars (UnitedHealth Faces Formal Probe, Wall Street Journal, December 27, 2006, p. B8). Is there a relationship between the magnitude of the restatement and the nature of the health care sector of the economy? Explain. The SEC's Division of Corporation Finance shared a Sample Letter Sent in Response to Inquiries Related to Filing Restated Financial Statements for Errors in Accounting for Stock Option Grants dated January 2007 (http://www.sec.gov/divisions/corpfin/guidance/oilgasltr012007.htm.) How helpful do you find such guidance?

fund balance

refers to a common group of assets and related liabilities within a not-for-profit organization and to the net amount of those assets and liabilities. While some not-for-profit organizations may choose to classify assets and liabilities into fund groups, information about those groupings is not a necessary part of general purpose external financial reporting (CON6, Footnote 45); fund balances may refer to such fund groups as operating, plant, endowment, and other funds (FAS 117, Par. 98).

permanent restriction

A donor-imposed restriction that stipulates that resources be maintained permanently but permits the organization to use up or expend part or all of the income (or other economic benefits) derived from the donated assets (FAS 117, Par. 168). Information about permanent restrictions is useful in determining the extent to which an organization's net assets are not a source of cash for payments to present or prospective lenders, suppliers, or employees and thus are not expected to be directly available for providing services or paying creditors (FAS 117, Par. 98).

pledges

receipts of promises to give

temporary restriction

A donor-imposed restriction that permits the donee organization to use up or expend the donated assets as specified and is satisfied either by the passage of time or by actions of the organization (FAS 117, Par. 168). Separate line items may be reported within temporarily restricted net assets or in notes to financial statements to distinguish between temporary restrictions for (a) support of particular operating activities, (b) investment for a specified term, (c) use in a specified future period, or (d) acquisition of long-lived assets. Donors' temporary restrictions may require that resources be used in a later period or after a specified date (time restrictions), or that resources be used for a specified purpose (purpose restrictions), or both. For example, gifts of cash and other assets with stipulations that they be invested to provide a source of income for a specified term and that the income be used for a specified purpose are both time and purpose restricted. Those gifts often are called term endowments (FAS 117, Par. 15).