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Healthcare Financial Management

Introduction

Healthcare is one of the salient aspects of human beings since it determines their ability to do their daily activities. Sick people cannot perform their roles as expected due to physical or mental disabilities. Even though, people do not fall sick often whenever they do they require immediate and quality medical attention regardless of the severity of the infection. However, most people do not know how healthcare facilities manage their finances while some do not know these facilities have finance offices. This discussion outlines the key objectives of healthcare financial management.

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Definition

Healthcare financial management refers to the processes involved in acquiring, planning, and utilizing money obtained by healthcare facilities (Longest and Darr 2008). Even though not all funds collected in hospitals are used within it, it is crucial to allocate adequate funds to healthcare facilities to enable them to offer their services without straining their resources.

Income Generation

Even though, the main aim of establishing a national healthcare facility is not to generate income like other business investments there is the need to generate money to cater to the needs of healthcare workers. The funds collected through offering healthcare services to the population play crucial roles in supplementing national budgets. In addition, these funds are used to pay staff, as well as purchase necessary equipment (Cleverly 2010). Therefore, it is essential to manage healthcare finances to evaluate the approximate figure a healthcare facility can generate. This allows governments to budget for various departments including the ministry of health.

Regulations

All private and government institutions have regulations that stipulate how they operate. These are policies that define their terms of service, working conditions, objectives, missions and visions. In order to fulfill these aspects, it is necessary to manage the available finances effectively (Gapenski 2011). One of the key rules in institutions is accountability which is achieved through effective management of resources. Even though, a healthcare facility has various sections it is essential to ensure all sections function according to the regulations and policies set by the management and other authorities. Therefore, as part of implementing a healthcare’s policies it is necessary to ensure all financial aspects of the institution are managed wisely.

Relationships

There is no department in any organization that can operate without assistance from other departments. Similarly, healthcare facilities rely heavily on other institutions and community organs in order to function properly. An institution cannot operate optimally without assistance from other related and unrelated organs. These sections include water and sewerage, electricity, security and communication (Nowicki 2011). However, for a healthcare facility to access these services it must have funds and a working finance department. These services facilitate the provision of quality services to the population. For that reason, it is necessary to ensure all finances are managed wisely.

Modes of Payment

One of the critical issues in the provision of healthcare services is determining the amount of money equivalent for services offered to the public. In most cases, it is impossible to determine how much a patient should pay for various services. However, it is easy to solve this problem if the finance department functions effectively. Part of financial management includes determining costs of services the healthcare facility offers to the public (Gapenski 2011). In addition, this department helps determine and prepare patients’ bills according to their needs. Moreover, the exercise helps determine methods and amounts of payment that are affordable and reasonable depending on the services offered. Healthcare payments can be challenging especially when done through electronic systems. This department facilitates acquisition of reliable machines like computers that are able to keep records and transact payments without inconveniencing patients or healthcare workers.

Evaluation

There is a common saying that it is easy to gauge individuals’ performance basing on how they handle money and related services. In healthcare facilities, physicians do not handle money directly like in business investments. However, it is easy to determine their efficiency through evaluating their services with respect to the tools and equipments they use (Gapenski 2011). Therefore, managing healthcare finances helps identify workers who work efficiently and use available resources responsibly. Moreover, this practice enables doctors and nurses to be responsible workers. This department evaluates workers’ suitability and efficiency with regard to their ability to taking advantage and maximizing on limited resources.

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Cost Control

The role of any manager is to improve efficiency through increased production and reduced costs. Most employees do not take their work seriously since they pay little attention to wastage and misuse of resources. They work without taking reflecting on the amount of money time and energy spent to acquire resources. Therefore, they end up misusing healthcare equipments leading to losses as a result of uncontrolled expenses. However, financial management in healthcare facilities ensures expenses are minimized to manageable levels (Cleverly 2010). This practice promotes accountability by all workers; therefore, curbs misuse of resources by budgeting for all expenses and allocating each section a substantial amount of money. In addition, this department surveys on the urgency and necessity of various expenses before allocating resources to them as well as seeking cheap but quality alternatives to reduce costs incurred in superfluous expenses.

Conclusion

Money is an essential commodity that enables human beings to access various services. Similarly, it allows healthcare facilities to offer quality services to patients as well as provide income to workers. Therefore, it should be used wisely to promote efficiency, transparency, production and accountability in healthcare facilities. This calls for the need to have qualified managers to handle financial resources in these institutions.

References

Cleverly, W.O. (2010). Essentials of Health Care Finance. Massachusetts: Jones and Bartlett Publishers.

Gapenski, L.C. (2011). Healthcare Finance: An Introduction to Accounting and Financial Management. Chicago: Health Administration Press.

Longest, B.B. and Kurt Darr. (2008). Managing Health Services Organizations and Systems (MHSOS). Baltimore: Health Professions Press.

Nowicki, M. (2011). Introduction to the Financial Management of Healthcare Organizations. Chicago: Health Administration Press.

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StudyCorgi. (2021, December 30). Healthcare Financial Management. Retrieved from https://studycorgi.com/healthcare-financial-management/

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"Healthcare Financial Management." StudyCorgi, 30 Dec. 2021, studycorgi.com/healthcare-financial-management/.

1. StudyCorgi. "Healthcare Financial Management." December 30, 2021. https://studycorgi.com/healthcare-financial-management/.


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StudyCorgi. "Healthcare Financial Management." December 30, 2021. https://studycorgi.com/healthcare-financial-management/.

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StudyCorgi. 2021. "Healthcare Financial Management." December 30, 2021. https://studycorgi.com/healthcare-financial-management/.

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StudyCorgi. (2021) 'Healthcare Financial Management'. 30 December.

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