Health care in America has always been expensive, if not completely out of control. It is no wonder then that so many people have poor health and limited access to quality medical services.

Over the past decade however, we have seen an explosion in overall health spending while at the same time, there have been significant disparities in how much money individuals and hospitals get paid for the same service.

This article will talk about one of the biggest drivers of this excessive spending – the hospital fee-for-service model.

Stay tuned for our “Introduction” paragraph!

Clinical pathways

A clinical pathway is a set procedure that most doctors follow when treating a specific condition. These procedures are usually determined by what works the best for the individual patient and their disease process, but still leave room for variation depending on personal factors like medication tolerance or side effects.

By having standardized treatments for certain conditions, patients feel more prepared because they know what to expect from the doctor’s approach. This also helps reduce stress as patients don’t worry about whether the doctor will choose something different than what was recommended last time he saw you.

Unfortunately though, this can be very costly under the current system where almost every physician is incentivized to order as much diagnostic testing and treatment as possible. More tests mean higher income for your doctor and his/her clinic, which means bigger paychecks for everyone else involved in providing healthcare.

Corporate bank

Another common corporate banking architecture is called the corporate bank or direct-bank model. This model looks very similar to the legacy core banking system, with the exception of no longer requiring an additional layer of middleware to connect to external systems like OCCIA (Open Channels Communications for Financial Initiatives), NETS (Networked Electronic Transaction Systems) or CLEVER (Cloud Ledger eFile System).

Here, instead of using these separate software packages as interfaces to other networks and financial systems, your internal applications directly connects to them.

This removes that overhead, making it easier to use those services than before. It also simplifies maintenance, since there’s less software you have to keep up-to-date.

The downfall of this model is that it can be much more expensive to implement than the first one we discussed. That’s because not only do you need to pay for the core banking software, but you must also spend money on new licenses for all of the different APIs you will be integrating into yours.

Commercial bank

Over the past few years, we have seen an explosion in the number of small to medium sized businesses that need help running their business effectively. These companies can be anything from offering online shopping services, to hosting websites or creating marketing materials for others, to taking over management of an existing website or even setting up an online shop!

Mostly, these business owners don’t have much experience in technology, so they turn to someone with more expertise in this field to help them launch their new venture.

This is where you come into play. You will be trained as a finance professional (or financial manager!), but also have strong software development skills. With these two things under your belt, you can start helping other entrepreneurs achieve success by acting as their digital business coach.

What is the difference between a digital business coach and a mentor?

A mentorship is one-to-one, typically face to face, relationship built around teaching and coaching individuals about a specific skill or area of knowledge. A digital business coach is one individual who has been trained in how to run effective virtual learning programs, but they are not necessarily paired off with another individual at this time.

That is what makes a mentor different to a digital business coach – a mentor pairs people together to form a group which benefits both members of the partnership.

Depository institutions

While not as well known, there are also what we refer to as depository institutions or deposit-taking organizations (DTOs). These include your typical banks that people know of, such as Chase Bank or Wells Fargo.

However, there are many other types of DTOs too! For example, credit unions are similar to regular banks in that they accept deposits, but their profits go directly back into the community rather than being invested in large corporations like some traditional banks do.

Another type of DTO is something called an “intermediary lender”. They take loans from one company and then loan it out to another company, thus creating a pool of money that can be lent out. An example of this would be a bank that takes loans from car companies and then loans them to individual buyers.

Lastly, technology companies sometimes offer services designed to facilitate banking. Companies like Google, for instance, will let you use their digital wallets to store all of your important financial information, which you can access easily through their apps and software.

Federal reserve

In economics, a federal reserve is an organization that manages one or more banking systems within its jurisdiction. Most major economies have such an institution that acts as a lender of last resort to the general public. The member banks in their system are required by law to work with the federal reserve when lending money to individuals and/or businesses. This way, the federal reserve can ensure that no bank goes under which would potentially cause a large financial crisis.

Some examples of what people refer to as the “Federal Reserve” are:

The Fed Banks

These are the member banks of the federal reserve. They are made up of both commercial and investment bankers that belong to the organization. Each has a certain amount of capital they must keep in order to remain members. These capitals are used to make loans to companies and individuals in their area.

For example, let’s say there was a company that went bankrupt and could not pay all of it’s bills. Their creditors wanted some of their money back so they gathered at the federal reserve and asked if they could take over the loan for this company. Since the federal reserve is a lender of last resort, most of the time they agree and take control of the loan.

This process is called liquidity injection and it helps prevent other investors from losing money because the business no longer exists.

State-run banks

The second major player in banking fintech is state run banks. These are typically referred to as “regular” or “traditional” banks because they are not for profit, but instead strive to maximize shareholder returns through earnings growth.

By having their own proprietary technology that helps them stay competitive, these banks are able to keep up with if not surpass private firms in terms of functionality.

Their software usually goes into more detail than what a third party platform can, which gives them an edge over some competitors.

Furthermore, due to their lower regulatory requirements (think less stringent capitalization rules), they are able to experiment more freely with new technologies. This allows them to add additional features that may be popular later on.

Lastly, many of these companies have strong internal teams that work together to develop their applications so there is less need for external developers.

Commercial paper market

The other major function of the Federal Housing Finance Agency (FHFA) is to regulate the commercial paper or short-term loan market. This includes loans that are not payable in more than one month!

Commercial paper comes in two main forms. Paper issued by companies for their own use, such as businesses taking out credit cards to buy equipment, is considered private business debt.

Private sector firms also issue “treasury securities” which are backed by most governments around the world. These include bills and bonds, but we will focus only on the former here. Treasury notes and bonds are usually sold to investors, either directly or through banks and brokerages who act as middlemen.

These types of investments are sometimes referred to as investment grade, as they are safe bets for an investor to put his or her money into. Companies that borrow money using treasury securities often go onto have success after doing so, as people trust them to pay back what they owe.

Treasury securities are typically paid off over several months, with extra money coming from income generated during this time or via interest payments to those investing in the asset.

How much money these institutions make off of the sale of treasury securities is dependent on many different factors– some having to do with demand and supply, others dependant on the issuer. But overall, it is a stable source of revenue for the company selling the security.

Federal funds market

The federal government runs large programs with spending that needs to be monitored closely. This is particularly true in an era of high budget deficits and competition for limited resources across various departments and agencies. To keep control over these expenditures, your company can become a consulting firm that offers services related to managing this money. These firms are typically called financial management or finance consultants.

Typically, they have access to internal reports and data from different departments and offices within the federal agency being consulted. These reports contain information about how much money was spent where, what goods and services were purchased, and why.

These accounts usually include things like office supplies, technology equipment, traveling expenses, and food. Since not everything needed to perform a job comes included as part of its position, these account often get paid separately through additional budgets.

Financial managers use all of this information to determine whether there is enough oversight and if anything seems out of place, then they notify their superiors so changes can be made.