HA520 UNIT 7 discussion 2 & 3
In two different paragraph with at less 100 words give your personal opinion to Elena Mears and Morenike Adeoye
Health care is the improvement of the health of a patient by proper diagnosis, treatment, and post-recovery follow-up care. Proper disease diagnosis is a crucial part of healthcare practices and nowadays it requires advanced technology which is very costly to afford by only heavy budget healthcare. In managing working capital, healthcare organizations face some common challenges, as well as other challenges that are particular to the institution. Global budgets give lump-sum payments, so theoretically a hospital would get the same amount of funding regardless of how many patients are treated. Even when hospitals are granted money through global budgets, however, the number of patients still affects costs, expenses and budget needs. Predicting patient numbers by taking a look at the local population and past patient numbers can help decide how many hospital beds and medical services the hospital might need in the upcoming months. Hospitals are always investing in new medical equipment and technology, which can represent a significant expense on budgets. When creating a budget for medical supplies and equipment, it’s important to consider total costs, including maintenance, installation, training, and related costs. Equipment, however, is an opportunity to potentially save money. Hospitals can choose to buy new equipment, but in many cases can save money by leasing medical equipment or buying remanufactured or used equipment. As physicians are added to a hospital, and as the hospital works to attract specialists and retain medical professionals, physician reimbursement will likely continue to represent one of the largest segments of most hospital budgets. Pensions, benefits, and salaries of hospital staff can represent one of the largest items of spending on any hospital budget.
Meditek: Budget Considerations for Healthcare Facilities Retrieved from https://www.meditek.ca/budgeting-for-healthcare-facilities/
Gapenski, L.C. & Reiter, K. L. (2016). Healthcare Finance, An Introduction to Accounting & Financial Management. (6th Ed.) Chicago, IL: Health Administration Press.
Financial planning is crucial to all healthcare entities. Regardless of the type of organization—acute hospital or small clinic, for profit or non-profit, government Veterans hospital or military facility – each must monitor their financial health and minimize costs to execute on the primary objective of providing healthcare services to those in need. Planning is the overall process of preparing for the future and it’s often a complex, and lengthy undertaking (Gapenski, L., 2016). A subset of planning is the budgeting process – a set of managerial tools that put into monetary terms, how resources will be obtained and used during a specific period of time (Gapenski, L.,2016). The information that comes out of the budgeting process is of great value to both senior and departmental management. For senior management, budgeting allows the allocation of resources across the organization. For middle management, the budget establishes a cost control benchmark (Gapenski, L.,2016). In general, the successful adherence to the budget provides feedback to evaluate performance of departments, individuals, service lines, or reimbursement contracts (Gapenski, L., 2016).
In large health organizations, it’s prudent to use top-down planning. This authoritarian approach ensures the perspectives of top management are reflected from the start (Gapenski, L.,2016). Bottom-up planning is collecting and planning from the departmental level up through the company (Gapenski, L., 2016). It may provide more detail and give junior management more chance to participate and thus “buy-in” to the resulting budget, but it is too time consuming in large institutions (Gapenski, L.,2016).
The majority of the healthcare market is made up of non-profit entities. And more not-for-profit organization executives lose their jobs because of poor financial management skills than for any other reason (McMillian, E., 2003). It is typical for a large, not-for-profit organization to have a board of directors with many executive titles such as chairman of the board, president, treasurer, an executive committee, and a budget and finance. committee. However, the staff executive is usually held primarily responsible and accountable for fiscal problems (McMillian, E., 2003). Managers must possess the accounting skills needed to make good business decisions and set attainable budgets.
Funds for a non-profit come from charity, religious fund-raising or grants and the appropriate and effective use of such funds have tax implications (McMillian, E., 2003). Conversely, for profit organizations must answer to shareholders and attainment to budget will impact company profit, future shareholder investment, and the ability to grow in the future.
Small physician practices or stand-alone clinics can use some other budgeting techniques. Since many such companies are actually partnerships, fewer people are involved in the planning and budgeting decisions. Budgets can be established from the bottom up and gain input from each department or group.
In government terms, a budget is a fiscal policy document that outlines revenues and expenditures an organization needs to budget carry out some specific functions during a set period. This period is called a fiscal year (FY) a twelve-month period where funds are collected and spent (Menifield, C.,2013). “The single most important function of a budget is accountability. It is one of many tools that can be accountability used to determine if an organization has accomplished its objectives as laid out by legislative and executive institutions” (Menifield, C., 2013).
Legislators can also use the budget to control a government agency such as a Veterans or military hospital. Legislators control appropriation of funds to an agency based on their strategic priorities. However, if they are dissatisfied with the agency, they have the legal right to withhold funds (Menifield, C.,2013). For example, some legislators complain that the problem with the VHA isn’t funding, its failure. Due to lack of transparency and years of mismanagement, the department can’t seem to meet any of its vital responsibilities – providing health care -- without going billions over budget (Gordon, S., 2017).
Gapenski, L. C., & Reiter, K. L. (2016). Healthcare Finance: An Introduction to
Accounting & Financial Management (Vol. Sixth edition). Chicago, Illinois: Health
Administration Press. Retrieved from https://searchebscohost.com.libauth. purdueglobal. edu / login.aspx?direct=true&db=nlebk&AN=1792718&site=eds-live
Gordon, S. (2017). The Battle for Veterans’ Healthcare: Dispatches From the Front
Lines of Policy Making and Patient Care. Ithaca: Cornell Publishing. Retrieved from https://search-ebscohost-com.libauth.purdueglobal.edu/login.aspx?direct= true&db=nlebk&AN=1527422&site=eds-live
McMillan, E. J. (2003). Not-for-Profit Budgeting and Financial Management (Vol. [3rd
ed.]). Hoboken, N.J.: Wiley. Retrieved from https://search-ebscohost-com.libauth. purdueglobal.edu/login.aspx? direct=true&db=nlebk&AN=108652&site=eds-live
Menifield, C. (2013). The Basics of Public Budgeting and Financial Management : A
Handbook for Academics and Practitioners (Vol. Second edition). Lanham, Md:
UPA. Retrieved from https://search-ebscohost-com.libauth.purdueglobal.edu /
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