PROBLEM ANALYSIS AND BUDGET IMPACT 5

Running Head: PROBLEM ANALYSIS AND BUDGET IMPACT

PROBLEM ANALYSIS AND BUDGET IMPACT 5

Problem Analysis and Budget Impact

Tanyanika McMillian

South University

The hospitals face different healthcare financial problems which at times can make the delivery of quality care to the patients difficult. Healthcare is one of the major industries facing financial problems. According to Bazzoli et al. (2008), the deficiency in the quality of patient care deteriorated at the time when many hospitals were facing financial crisis. Therefore, the quality of attention given in the hospitals dependent on its financial stability. The purpose of the paper is to create an analysis of the patient care financial problem and to identify more financial problems based on the interviews carried on the management of hospital and the available literature review.

The primary purpose of the hospital is to provide care to the patient, a task which can be costly. Maintaining the health care staff can be expensive. The problems identified were compiled after interviewing more than 150 employees faced with financial challenges. The main basis of the problems in the health care industry as indicated by the chief financial officer and the senior accountant of the hospital is the lack of skilled labor and information to implement the budget (Bazzoli, Chen, Zhao, & Lindrooth, 2008). Few employees are involved in the budget-making of the hospitals. Although budgeting is very instrumental to the success of any organization, lack of skilled labor to implement it poses a challenge to many hospitals. Many hospitals have insufficient workforce who have financial skills (McKeeargue, 2010). Managing the funds becomes a difficult task for the hospitals and it becomes difficult for the hospital to use the available financial resources to achieve quality care resulting in a healthy society.

Report by the Berger (2008) identified another healthcare financial problem as managing investment in a capital strained environment. There are current changes happening in the industry such as frequent change in laws mainly the healthcare reform. Another change recorded is the expansion of healthcare access and growing patient demands, which can reflect high costs for hospitals if they care for to many patients that do not have health insurance. Besides the increasing demands of patients, there is pressure on the hospitals to cut costs. The restriction is put on how much can be spent on improving the patient’s health. Therefore, the rising demands for services from the patients is another cause of health care financial problems.

Also, hospitals are also facing challenges in adapting the market forces. They have adopted the market forces as any other conventional business (Karanikolos, 2013). A good example is the mergers that have become prevalent in the health industry. It is a current landscape that hospitals are adopting. Many small hospitals are hospitals consolidating and joining forces to operate under the same umbrella. Again, the patients have let their voices be recognized as consumers, enabling them to demand quality services. As nurses, it is important that they be the voices for the patients and themselves as staff. Nurse play an important part in the budget development because they have vital input on how a nursing unit can run efficiently, give quality care and stay within the budget. To achieve this communication has to be open with the staff employees and corporate. The market forces are making it difficult to recruit and retain clinical talent in the hospitals (Andersen, Rice, & Kominski, 2011). When hospitals have retention problems, poor working conditions tends to be the reason, resulting in the hospital facing remunerations of the staff increasing the financial pressure on hospitals. Hiring new staff costs money, requiring the employer to get background checks at a cost, and the man hours of orientation just to name a few.

Finally, the last financial problem to healthcare is a high level of bad debts. Some services such as emergency care are leading to increased cost of care to hospitals (Berger, 2008). The hospitals have to devise ways of reducing bad debts such as reducing the unnecessary visits to the emergency room. Most of the emergency room users should be redirected to non-emergency care setting. Many hospitals have recognized this and they triage patients that are non-emergent to urgent care.

In conclusion, the financial health care costs can be reduced by the development of efficient cost accounting department that will allow a deeper look into hospital finances to increase viability and profitability. In so doing, the hospital will counter the problem of insufficient budgeting. Finally, the hospitals should develop different ways of reducing the level of bad debts.

References Andersen, R. M., Rice, T. H., & Kominski, G. F. (2011). Changing the US health care system: Key issues in health services policy and management. John Wiley & Sons. Bazzoli, G., Chen, H., Zhao, M., & Lindrooth, R. (2008). Hospital financial condition and the quality of patient care. Health economics, 17(8), 977-995. Berger, S. (2008). Fundamentals of health care financial management : a practical guide to fiscal issues and activities. San Francisco: Jossey-Bass. Karanikolos, M. (2013). Financial crisis, austerity, and health in Europe. The Lancet, 381(9874), 1323-1331. McKeeargue, M. (2010). Budget crises, health, and social welfare programmes. Bmj 341, 77.