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Healthcare Organizations Financial Management

The functioning of any healthcare organization presupposes diverse financial challenges that might deteriorate outcomes and result in the significant decrease in the efficiency of health workers or provided services. Under these conditions, budget planning and accounting become critical activities that should be given much attention to consider all aspects of the healthcare finance system and implement the most efficient projects within the existing costs. The complexity of the task is also evidenced by numerous issues that should be considered while making a decision or planning spending. The suggested paper describes the central components of the healthcare finance and lists phenomena that might impact decision-making regarding particular scenarios.

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Nevertheless, before choosing a particular option from the list, it is critical to understand what factors impact the distribution of funds and their flow. The first component of the healthcare finance system important for the case is the insurance and payments for medical care and services. The fact is that all health projects should be organized regarding the patients ability to pay for suggested services and their affordability (Rundio, 2016). Otherwise, the incentive will fail. That is why it is critical to consider the aspect of insurance. Therefore, the second component is governmental regulations and policies that exist in the sphere and regulate the financial aspect of the functioning of the facility, its budget, taxation, etc. (Duston, 2015). The success of any project to a greater degree depends on its ability to meet all existing requirements and exist within the given legal environment. Finally, the planned profit is another component that should be taken into account (Rundio, 2016). Implementation of any project should be preconditioned by the analysis of long-term perspectives to ensure that the stable level of revenues will be acquired.

All above-mentioned components obviously impact each other. For instance, governmental regulations and policies determine the current approach to medical insurance, its size, peculiarities of use, etc. (Rundio, 2016). For this reason, the slightest alterations in this framework will affect the facilitys financial plan by altering insurance schemes. It will also mean that the planned profit will be changed and the selected project will fail because of the instability of the financial sphere. In such a way, the interaction of these components should be considered while deciding on one of the suggested project (Barr, 2016). It is essential to select the option that minimizes risks connected with the governments interference into the healthcare sector and rests on the existing approach to insurance. It will help to avoid significant complications in future and preserve the functioning of the medical unit at the high level.

Analyzing the suggested options, it is fundamental to collect specific information about the environment, existing problems, competitors, patients demands, and financial state of the unit. Additionally, the return generated if one of the suggested options is accepted becomes an important element that should be investigated as it will shape the units strategy and its activities regarding the existing financial plan. Second, the demand for these projects should be evaluated. Being an extremely competitive environment, the healthcare sector introduces specific requirements for the financial management as it is critical to ensure stable financing (Barr, 2016). For this reason, all opportunities related to the implementation of one or another option should be researched. This information will impact the decision making and final choice.

Considering all above-mentioned facts, there are two projects that should be recommended. The first one is the overhaul of the cardiovascular lab with the cost of about $900,000 for a room. First, it guarantees a 3% return in costs during next several years because of the advances in operational effectiveness. Second, cardiovascular diseases are considered one of the leading causes of death worldwide (Rambur, 2015). Moreover, there is the tendency towards the deterioration of the situation. In such a way, the increased topicality of the given issue preconditions the choice of this project. It will help to meet patients requirements, provide them with the advanced care and hospital to preserve its image and implement innovations.

The second project that should be introduced is the purchase of a 50-physician practice. First, it will deprive another hospital of competitive advantage and guarantee that constant patient stream. Second, despite a significant investment ($2,800,000), the project will obviously generate a profit because of the high demand for this service and the practices strong unitization in the facility.

These considerations could also be applied to the hospital as a for-profit system. First, they are focused on generating revenues and guaranteeing the units development. Second, the choice of the projects rests on their ability to satisfy existing demands for particular services which means that they will remain popular and guarantee stable income which is fundamental for for-profit systems (Rambur, 2015).

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Altogether, the functioning of any medical unit presupposes the appearance of numerous challenges related to the financial sector that should be solved to guarantee the units further rise and development. For this reason, implementation of new projects should be reconsidered by the in-depth analysis of all their aspects and hypothetical outcomes.


Barr, D. (2016). Introduction to US health policy: The organization, financing, and delivery of health care in America. Baltimore, MD: Johns Hopkins University Press

Duston, P. (2015). Analyzing form, function, and financing of the U.S. health care system. Boca Raton, FL: CRC Press.

Rambur, B. (2015). Health care finance, economics, and policy for nurses: A foundational guide. New York, NY: Springer Publishing Company.

Rundio. (2016). The nurse manager’s guide to budgeting and finance. Indianapolis, IN: Nursing Knowledge.

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1. StudyCorgi. "Healthcare Organizations Financial Management." December 25, 2020.


StudyCorgi. "Healthcare Organizations Financial Management." December 25, 2020.


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StudyCorgi. (2020) 'Healthcare Organizations Financial Management'. 25 December.

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