An in-depth study of health care economics and the financial management of health care organizations. The economic principles underlying the American health care market and the financial management of health services organizations within that market are examined. Analysis covers free market and mixed market economies; barriers to free market economies; health care industry regulation, licensure, and certification; and various coverage and health care payment mechanisms. Topics also include reimbursement mechanisms and their effect on health care provider organizations, managed care, capitation, and per case or per diagnosis payment, as well as how these financial strategies are utilized by third-party payers. Focus is on financial challenges such as uncompensated care, cost increases, increased competition, and increased regulation and how health care providers should respond to them. Ratio analysis, cost analysis, working capital, capital budgeting and investment in relation to net present value and value added to the organization, and other financial management techniques are also discussed.