...HCS 577 September 2012 Health Care Budget Manage a health care organization is not an easy task, the compromise with the community to provide an excellent service and the responsibility of keeping the profitability and viability of the organization makes health care management a complex and every day challenging profession. It require effective practices to avoid the failure of the business. Independently if the organization is not-for-profit or for-profit, a vital duty of the management team is to keep the organization finances in a status that allows it to operate, and produce a level of revenue that secure its existence over the years. To reach these objectives, managers must perform key functions that involve planning, decision making, controlling, organize, staffing, among others. The planning function is a vital chore of health managers that includes the identification of goals, and objectives to take the organization to the desired future state based on the current conditions (Liebler & McConnell, 2008). As part of the planning process, the task of budgeting plays an important role in the effective guidance of the organization toward the established goals and financial stability. Budgets permit managers to allocate financial resources in the planning process, evaluate the financial performance of the organization in a specific period as well as planning, control, and establish benchmarks with previous years details to identify strengths and weaknesses that will...
Words: 1086 - Pages: 5
...Developing a meaningful budget in the current health care setting is a taxing endeavor. Possessing the knowledge to discern which financial management practices will be most effective from those that will negatively impact the budget is essential to managing and monitoring the budget. “An accurate, useful budget can be a valuable decision-making tool to analyze potential business threats and opportunities and help the administration make sound strategic and disciplined choices” (Maller, 2015). The effective and ineffective financial management practices within a health care organization correlate with the long-term financial sustainability of the organization. Implementing the financial tools requires transparency and accurate knowledge of the day-to-day operations of the organization. Effective management utilizes the budget as a tool to set the financial expectations for the practice to compare the performance to financial plan. Buy in, and accountability from the administration and other key stakeholders is required to create effectively and execute the budget. “A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another”("Budget analysis," 2015). An efficacious operating budget is aligned with the vision of the organization to attain the desired targets. Successful leaders maintain accurate balance sheets. Balance sheets summarize a company's assets, liabilities and shareholders' equity at a precise point in time; depicting...
Words: 817 - Pages: 4
...Health Care Budget An operating budget is a strategic initiative for the organizations financial plans over the course of the coming year. The operating budget works directly with the Statement of Activities (SOA) for a fiscal year to accomplish the organization financial goals. To produce an effective operating budget the organization needs to have knowledge of what financial management practices work best for the financial goals they are planning to use. Proper understanding of these concepts is vital for the operating budget to become successful for the upcoming year. Effective Financial Management Practices Effective financial management practices include several types of rules that an organization should follow to create a successful operating budget. Budgeting should focus on income first targeting the reliable income in the budget. Never filling those gaps with income projections to cover expenses can cause a deficit if your organization can not produce the income target within the year. Expenses should be lower than the dependable income total. Each department should be in agreement with this financial management practice. This leaves the additional programs and projects to be set in motion if the revenue allows additional funds (Hamilton, 2010). A financial management practices uses the beginning with the prior fiscal years total, and building the new upcoming year budget on those amounts. This takes calculating percentage of increases and decrease to determine...
Words: 782 - Pages: 4
...Health Care Budget Effective financial management is the basis of thriving health care organizations. Organizations must make good investment decisions based on objective analysis (Healthcare Financial Management Association [HFMA], 2005). Integration of financial management principles provides decision makers with guidance to make capital decisions maximize mission-based benefits at effective costs (HFMA, 2005). An operating budget is the statement of profit and loss for the entire organization. Various health care entities prepare operating budget for the following year for discussion and approval by top management (Academic Writing Tips, 2011). At the end of the year, departmental managers provide an account for the previous year’s financial performance (Academic Writing Tips, 2011). Effective Financial Management Practices in Creating and Monitoring a Budget Effective financial management is useful when creating and monitoring a budget. The budget must include data relevant to the organization. An operating budget is a profit and loss statement of projection. The budget must include estimates of revenues and future expenses. Financial managers should present the operating budget with the correct schedule. Leaders must present financial statements such as the Statement of Cash Flow, Statement of Revenue and Expense, and Balance Sheet with the operating budget as supporting documentation explaining the financial practices of a company (Academic Writing Tips, 2011)...
Words: 903 - Pages: 4
...decisions based on the analysis of the budget. In this paper, financial management will be reviewed. The most effective and least effective financial management practices in creating and monitoring an operating budget will be discussed. Planning, organizing, directing, and controlling activities such as procurement and use of funds make up financial management. Financial management involves all departments of an organization. Financial management relates to the use of funds from various resources and financial decisions depend upon the source type, the financing period, the financing cost, and returns. Procurement, allocation, and control of resources are concerns in financial management. Some financial management goals include ensuring a supply of funds to various areas in an organization, ensuring returns to investors, and ensuring the best utilization of funds. According to Gapenski (2008), an operating budget “is a combination of the revenues and expense budgets. Operating budgets are prepared at the subunit level” (p. 234). An operating budget is a statement of profit and loss. An account for the previous year’s financial performance is provided by the different departments in an organization at the end of the year. In addition to the operating budget other statements are needed, such as the Statement of Cash Flow, the Statement of Revenue and Expense, and a balance sheet. These statements provide supporting documentation. The operating budget must include estimates of revenue...
Words: 560 - Pages: 3
...Health Care Spending Ninnette Paulino HCS/440 Economics: The Financing of Health Care August 25, 2013 Michele Burka America’s national health care spending grew by 3.9% each year from 2009 to 2011, the lowest since the federal government began keeping these records in 1960. That slow growth appears to have continued into 2012, when expenditures totaled an estimated $2.8 trillion. The biggest reason for this slowdown is that people have spent less on health care in weak economic times. As people were losing their jobs they were losing their health coverage and then hold off on seeing a physician. Even workers that are employed with company-sponsored plans they face large-out-of-pocket costs that they’d rather avoid unless it is truly necessary (Luhby, 2013). According to the Kaiser Family and Foundation and Altarum Institute, they predict that this dampened spending pattern is unlikely to last much longer. As the economy picks up, health care spending is expected to increase, rising to an annual growth rate of more than 7% annually by the end of the decade (Luhby, 2013). When President Obama released his fiscal 2014 budget he proposed a chained CPI- to shrink cost-of-living adjustments for retirees. The use of chained CPI in Social Security and elsewhere in the budget would reduce deficits by $230 billion over a decade. It is also includes $392 billion in savings from Medicare and other health programs by raising Medicare premiums for wealthy retirees and negotiating...
Words: 1395 - Pages: 6
...Above and Beyond Home Care Budget Plan Shanitra Williams Webster University- LRAFB Abstract There are many home care agencies and organizations with the demands of providing services to much of our communities. One must wonder consider what is the cost to funding particular organization to meet this demand? The cost is just as extensive as the reasons why resources are made available to the agencies. There are many governmental grants, and funding that may provide assistance to these agencies. The need to present an appropriate budget is just as important as providing the services. The organization need to have a plan in how their services and resources will be distributed throughout the term of the each year. Above and Beyond Home Care is one many agencies that have the passion to make a difference in individuals who have the will to live independently. But without the proper budget it would have been impossible for this happen. This research will have detail research information about their procedures, annual budgets, participants, results and data analysis. Above and Beyond Home Care is one of many health care agencies that provides services and resources to individuals. I chose this agency not only because of its name but because what is stands for. As I research the background of the agency, I notice that they have the patient to endure just about anything. In the research I volunteered my time and made an effort to seek to understand their need to influence...
Words: 1965 - Pages: 8
...Medicaid counts as one of the largest sources of public health insurance in the United States, and also in the whole world. It provides essential medical cover to vulnerable population within the United States. This population includes elderly individuals, expectant mothers, children, low income families and individuals with different physical disabilities and the disadvantaged in the American society. In 1965 President Johnson signed into law under the Social Security Act to improve the health care of the elderly with Medicare. Medicaid would provide improved health care for the poor, unwed mothers, children, and the disabled. The program involves a joint initiative between the states government and the federal government hence the two governments jointly fund the program and ensuring its success through putting up laws to guide its implementation. President Obama’s legacy will be protecting the health of the individual American. The health care policy rules, regulations, and legislations are the consequence of the policy procedure which involves legislators, all the decision-making branch leaders, and public also. The budget for Illinois starts when the Governor submits a bill each January to the House of Representatives. After the bill has been submitted by the Governor then the house is responsible for ways and means review then they budget and develop their own recommendations. The next step is that the budget is then debated as well as voted on by the full House...
Words: 1986 - Pages: 8
...There is approximately sixty million Americans with this health care coverage. Individuals with disabilities, parents, seniors, pregnant women and children are all eligible to receive the Medicaid plan. With federal minimum standards in place each state sets there individual criteria. Some federal laws in place are to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover other population groups (optional eligibility groups). Medicaid, individuals must satisfy federal and state requirements regarding their current residency, immigration status, and documentation that they are a U.S. citizen. The Affordable Care Act of 2010 helped to expand Medicaid in 2014. “The Affordable Care Act provides Americans with better health security by putting in place comprehensive health insurance reforms that will: * Expand coverage, * Hold insurance companies accountable, * Lower health care costs, * Guarantee more choice, and * Enhance the quality of care for all Americans. Most recently, the MMA of 2003 included increases in DSH state allotments for 2004-2011 and added requirements for an independently certified annual audit. Figure 8.14 shows DSH funds as a percentage of the total Medicaid budget. The Affordable Care Act actually refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152)...
Words: 1826 - Pages: 8
...Medicaid and the Children’s Health Insurance Program Student Name Name of Instructor University Location of School Date Introduction The Children’s Health Insurance Program (CHIP) was initially created in the U.S. in 1997 in an effort to respond to the needs of millions of children that lacked health insurance coverage. Although the primary focus of the program was to assist in improving the access to health care services among children, it was also a relief to parents who became more motivated to take care of the additional needs of their children. While Medicaid was introduced as a publically funded health care program to assist people seeking access to health care services, CHIP was specifically tailored to meet the health care needs of children. The main purpose of this essay is to present an exploration of Medicaid and CHIP. One of the key areas to explore includes examining the legislation that introduced Medicaid and its funding sources. Medicaid Legislation and Funding One of the key areas to examine with regard to Medicaid is the legislation that introduced this particular program and its funding sources. The legislation of Medicaid, Moore and Smith (2006) observe that it took advocacy groups like Trade Unions, Advocates, and Public Welfare Associations to enhance the visibility of medical concerns that were evident in the population. One of the challenges that seemed to persist before the legislation of Medicaid is the fact that not many...
Words: 1316 - Pages: 6
...Economic Issues Simulation Budget constraints increasingly determine the provision of health care services. One of the promises of cost-effectiveness analysis is that it can demonstrate how to maximize the health care benefits attainable within a specific budget.1,2 Despite this promise, cost-effectiveness analysis has been criticized for setting health care priorities in a way that violates people's values.3-5 For example, many people value equity in the distribution of health care resources, yet equity is not accounted for in cost-effectiveness analyses.6-13 A basic assumption of cost-effectiveness analysis is that one should always prefer a health care intervention that provides a population with more benefit per dollar than another intervention. However, sometimes budget constraints make it impossible to offer the most cost-effective intervention to everyone in the population, raising issues of equity.14 For example, suppose one has a fixed budget of $200,000 with which to screen a specific population for colon cancer. Test 1 costs $200,000 to offer to everyone in the population and prevents 1000 deaths from colon cancer. Test 2 costs $400,000 to offer to everyone and prevents 2200 deaths from colon cancer. Because of the budget, it is impossible to offer test 2 to everyone. However, it is possible to offer it to half the population, thereby exhausting the $200,000 budget and preventing 1100 deaths from colon cancer. Test 2 is more cost effective than test 1, because for...
Words: 996 - Pages: 4
...HCS/577 – Financial Management in Health Care Financial Data Analysis Introduction To have a full understanding we need to know what an operating budget is and it can be defined as the upcoming statement of profit and loss for the different divisions and units of a company as well as the company as whole for the upcoming year. To identify the variances as well as to monitor things this operating budget is normally divided into what is usually called quarters. For a health care company these budgets are prepared for the following year and is normally discussed for some kind of approval by the upper management teams. When the year is at an end the management team that is in charge of certain areas are then asked to provide an account of the performances from the previous year. Effective financial management practices in creating and monitoring an operating budget When it comes to creating and monitoring a budget, the use of financial management should not be overemphasized. To start off, the budget construction form should be able to identify all of the relevant data that is involved. The operating budget can be best utilized as a profit and loss statement projection and to prepare the estimates of expenses and future revenues. To make it easier to monitor Finkler (2006) states that an operating budget should be presented together with...
Words: 948 - Pages: 4
...Australian Health Care system is a continuous process and the system change will affect all consumers from all background as well all health professional. Rural and remote areas health care: The shortage of healthcare professionals in rural communities is a global problem that poses a serious challenge to equitable healthcare delivery. In Australia rural areas are underdeveloped in most of these areas (rural and remote areas). About one-third 32 per cent of Australians live in rural and remote areas 29 per cent in regional areas and 3 per cent in remote areas (AIHW, 2008a). Persons in rural communities can suffer more chronic health due to the lack of health care services in rural areas. My review discusses an overview of and the lack of services within these communities. As stated in the a discussion papers on Primary Health Care (www.health.gov.au), geographical location accessibility to and availability of appropriate health services and rural and remote environments including socioeconomic status, lifestyles, and are undoubtedly the hallmark characteristics of rural and remote Australia. The lack of distance and transport are major problems to accessing health care for many rural Australians. Health care systems servicing the needs of rural and remote Australians cannot be seen apart from the transport system that either takes services to the people or brings patients to those services. Health transport may be required at different points within the health care system...
Words: 1270 - Pages: 6
...21, 2013 for the public. He delivered a speech that previewed the priorities that he intends to pursue for his second-term (Tribune Newspaper, n.d.). His priorities include things like: gun rights, budget plans, and jobs for America. Obama is calling to give a fair shot to the middle class (Dorning, 2013). The Affordable Care Act is also in his plan for the next four years. Obama propose the “The Budget Plan”. Jobs for America, the middle class, and affordable care were discussed in this plan. Amy Goodman stated, “President Obama has unveiled a budget plan seeking to trim the federal deficit by cutting or eliminating over 200 federal programs, many dedicated to social services and education.” The Budget was a $3.7 trillion proposal that would cut funding in half for the IHEAP (Income Home Energy Assistance Program). This program subsidizes heating costs for low-income Americans. President Obama called for a freeze on annual domestic spending over the next few years. The Budget Plan also calls for cutting $300 million from community development block grants. Obama’s plan includes two modest tax hikes for banks and oil companies. However, the Budget does not only include those things. The Budget implements the tight discretionary spending caps that Obama signed into law in the Budget Control Act of 2011. Barack also wanted to limit an expansion of the Pell Grant Program for low-income college students (Goodman & Gonzales, 2011). For Obama’s second term, he wants to build...
Words: 1128 - Pages: 5
...MASTER PROGRAM 502 NUR HEALTH CARE DELIVERY SYSTEM Health care system Environment Presented by :EIDAH ALHARTHI, Supervised by : Dr. MELENA Outline : * Introduction * Goals of health care system. * The scope and size of healthcare system. * The basic functions of healthcare system: financing; insurance; payment; delivery (Providers). * Health care system: * A health care delivery system is a mechanism for providing services that meet the health-related needs of individuals. * Goles of health care system: * There are two key objectives of a health care delivery system: * To provide universal access and to deliver services that are cost-effective. * To meet pre-established standards of quality. * Health care services in Saudi Arabia have been given a high priority by the government. During the past few decades, health and health services have improved greatly in terms of quantity and quality. * HOW !! * Gallagher has stated that: “Although many nations have seen sizable growth in their health care systems, probably no other nation (other than Saudi Arabia] of large geographic expanse and population has, in comparable time, achieved so much on a broad national scale, with a relatively high level of care made available to virtually all seg- ments of the population. * According to the World Health Organization (WHO) , the Saudi health care system is ranked 26th among 190 of the world’s health systems. * It comes...
Words: 5140 - Pages: 21
