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About the Author: Dr. Mosavin is Dean and Professor of the College of Pharmacy and Health Sciences at Texas Southern University. He received a B.S. in Pharmacy from the University of Kansas, a Ph.D. in Pharmaceutical Sciences from the University of Wisconsin—Madison, and an MBA from the University of Chicago. He is an experienced pharmacy educator and administrator who has also worked in the pharmaceutical industry, hospital pharmacy, and ambulatory care pharmacy settings. His research interests encompass economic evaluation of health care delivery systems and the role of pharmacists in these systems (especially as it relates to management of chronic diseases by pharmacists). Another key area of his research is analysis of economic gains achieved by health information technology implementation in ambulatory care pharmacy practice. Dr. Mosavin teaches business plan writing and independent pharmacy finance while advising students and pharmacists in the National Community Pharmacists Association (NCPA).
After completing this chapter, readers should be able to
Describe the importance of accounting principles in pharmacy practice.
Compare and contrast the fundamental objectives of a balance sheet and an income statement.
Demonstrate the relationship between a balance sheet and an income statement for a given fiscal year.
Describe the utility of financial ratios and interpret basic financial ratios used in community pharmacy practice.
Describe and integrate the financial information depicted in a balance sheet and an income statement in community pharmacy practice.
Define the flow of funds involved in community pharmacy practice, including expenses, prescription adjudication, receipt of payment, and revenue generation.
Describe the basic financial and productivity reports used in hospital pharmacy practice.
It was a beautiful summer day when Marco and Diana met at a coffee shop near where they had gone to pharmacy school. It had been just a couple of years since they had graduated, but they had a lot to catch up on. Marco had always wanted to own a community pharmacy but was currently working in a chain community pharmacy to gain experience and save money. Diana had recently finished a cardiology fellowship and had accepted a clinical faculty position at a large teaching hospital. Diana was interested in hospital pharmacy management and was hoping eventually to be given some administrative and leadership responsibilities in the pharmacy department.
Over the past 2 years, Marco and Diana had begun to gain an appreciation for the need to track the use of money. On a personal level, Marco was beginning to pay off his student loans. Not only was he successfully paying off his loans, he was actually beginning to save some money for his future. While Diana was able to defer payment on her loans during her residency and fellowship, she had to learn to ...