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Budget Change

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Submitted By kamal1958
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Budget Changes Budget Changes HCS 405 May 20, 2013 Budget Changes
How might financial managers budget for unforeseen changes and improvements in information technology that require large capital outlays?
A financial manager needs to have a portion of their budgets used as a state of credible advancements for all the systems in the hospital organization. In medical association, an information department consists of a lot of changes over a small period of time. A good facility will need to be familiar with the changes that occur within information technology and should have a set budget available to handle upgrades for the systems. Hospitals need to update their software system every couple of years. Many healthcare institutions will hire a third party company to be in charge of updating the hospital system with the latest information technology. Moreover, financial managers will require to take into consideration the benefits and cost, if the institution decides to transition to a newer system .The latest technology transition in the health care field is the adoption of ICD-10. This system will provide the following benefits:

Financial managers must always have a part of their budget to be used as reference for possible upgrades of all the system in a medical organization. Information technology is a department, which comprise many changes over a short period of time. The medical organization will compete for the best computers or information technology. A medical facility will need to be familiar with the changes that occur within information technology and should have a set budget available to handle upgrades for the systems. Hospitals need to update their software system every couple of years. Numerous healthcare institutions will hire third party company to be in charge of updating the hospital system with the latest information technology. Financial managers will need to take into consideration benefits and cost, if institution decide to transition to a new system .The latest technology transition in the health care field was the adoption of ICD-10. This system will provide benefits such as:
* More accurate payment for new procedure
* Fewer rejected claims and fewer improper claim
* Improved disease management
* Setting health care policy
* Better understanding of health care condition and health care outcomes
* Harmonization of disease monitoring and reporting world-wide
* Higher quality data because of improved medical coding accuracy
* Preventing and detecting health care fraud
* Improving clinical, financial, and administrative performance
Financial managers will have full control on deciding whether or not to transition into this system. Some of the options include direct adoption and cash flow disruption costs. Some factors to take into consideration will be that some of this cost will be a one time cost, while other is a reoccurring cost. There is three of ICD-10 adoption cost includes: system cost, training cost, and productivity cost. Hospital must likely have to upgrade multiple Information Technology system to support this conversion. This transition will need major capital funds and increase of staff. This system will require training programs. Hospitals will have to implement training program in medical records, finance, and billing department.
The main purpose of this training class is to make sure that the staff has the necessary skill and knowledge to the implementation of this system. This will lessen the productivity impact linked with a learning program. The transition of this system will have an impact on nurse, physician case management, and other staff members. Many hospital institutions will face many financial burdens due to this transition. Health care institution will have to replace or modify their existing Information Technology software for a newer and more expensive Information Technology system that will include new codes. This system will require many changes financial managers should assess the potential impact on operation, finance, and technology to determine the work required to accomplish this implementation.
Reference
Baker, J.J., & Baker, R.W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Jones & Bartlett.

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