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What Do we Know about Healthcare Business Financial Decision

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Health care professionals play an important role in society

As such, there is a need for these professionals to understand the various health care reimbursement systems and methodologies to discharge their duties. There exist various financial systems adopted to cater for the financing of healthcare with each plan posing its risks as well as the incentives these systems exists solely because most patients have an insurance plan.

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It is common for people to confuse financial management and accounting. Financial management is a decision making process that entails the use of theories, concepts and tools to make better financial decisions. Accounting simply provides a way to gauge the financial performance of a business as well as budget for its functions. From these two definitions it is quite overt that financial management is very crucial in the healthcare sector. Initially financial management was viewed in a very simplistic manner. In an organisation, the project’s financial demands would be made for goods and services. The management would estimate the amounts that should be spend on the project. Finally the accounting department will see how the funds would be raised to meet these needs. However, with the advancements in the study of financial management, other factors are now considered including: planning for, acquisition and utilizing funds to improve the efficiency of the organisation. Every organisation must have their own set of financial management goals. These goals and objectives will depend Proofreading-Editingon the line of business that they are involved in.

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However, what if you only enroll 15 students, or if you cannot recruit junior lecturers and so are forced to recruit senior lecturers instead? Spending some time thinking about “what if” scenarios is always a healthy exercise. Sensitivity analyses will enable you to look at different outcomes in an objective manner and work through how you might cope if things did not go exactly to plan (Sandars J, Walsh K, Homer M. 2010). You might be able to compensate for reduced numbers of students in the diploma by modularizing the course and recruiting larger numbers onto a certificate course. You could think of alternative faculty to recruit onto the course or consider putting some or all of the course online – junior lecturers may not have time to cope with regular face to face sessions but may have time to cope with an intermittent online commitment. Budgeting is ultimately about measurement: In ideal circumstances, those responsible for the budget are able to show that investment in education improved healthcare professionals’ competence and also patient care. This is difficult to prove – not least because of the problematic nature of measuring the quality of care (Fox RD, Harvill LM., 1984)

However, there is no question but that this is the ideal to which we should aspire to.

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By and large, the primary role of financial management in healthcare organizations is to manage money and risk in a way that helps to achieve the financial goals of the organization. When a healthcare organization has strong and organized financial management plans, they're able to provide efficient healthcare to all their patients.

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Sandars J, Walsh K, Homer M. High users of online continuing medical education: A questionnaire survey of choice and approach to learning. Med Teach. 2010;32:83–5.

Walsh K. Online educational tools to improve the knowledge of primary care professionals in infectious diseases. Educ Health (Abingdon) 2008;21:64.

Snell L, Tallett S, Haist S, Hays R, Norcini J, Prince K, et al. A review of the evaluation of clinical teaching: New perspectives and challenges. Med Educ. 2000;34:862–70.

Wetherbe JC, Montanari JR. Zero based budgeting in the planning process. Strateg Manage J. 1981

Harvard Business Review. Harvard Business Review on Negotiation and Conflict Resolution. Boston: Harvard Business School Press; 2000.

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