Finance and Reimbursement Over the

Finance and Reimbursement Over the last several years, the issues of finance and reimbursement have been increasingly brought to the forefront. Part of the reason for this, is because health care costs have been rising exponentially. Evidence of this can be seen by comparing the total amounts of GDP spending that accounts for health care services in the United States. According to a study conducted by Centers for Medicare and Medicaid Services, they found that health care costs accounted for 17.3% of the total GDP spending in the United States.

(Pickert, 2010) This is significant, because it shows how these costs are becoming a major issue that is affecting a wide variety of organizations. In the case of California Hospital Medical Center they are facing similar kinds of challenges including: there are strains from capital expenditures, the misuse / misappropriation of funds, there are limited income sources and there is little outside financing available. These different elements are problematic, because they will eat away at the financial foundation of the hospital.

Once this begins to occur, it can mean that the facility will face the possibility of bankruptcy and closure. To avoid these kinds of situations requires examining the how these weaknesses are affecting the facility and what steps can be take to address them. Together, these different elements will provide the greatest insights as to how the California Hospital Medical Center can effectively implement strong financial and reimbursement controls.

The Weaknesses Affecting California Hospital Medical Center In general, California Hospital Medical Center is using an accounting system that is common for most health care providers. This is based upon maximizing the reimbursements that they are receiving from different government programs and the insurance companies. However, the problem with using this approach is that there are no effective ways to control the underlying costs. This is troubling, because it means that the facility will continue to provide the same kinds of services.

While seeing, their costs and their profit margins dramatically increasing. Once this occurs, it can eat away at the foundation of the hospital. This is the point that administrators will begin to seek out some kind of sacrifices from the staff. (Zelman, 2009, pg. 17) Early signs of this are beginning to take place with the strains from large capital expenditure purchases and the misuse / misappropriation of funds. These elements are important, because they are showing how the hospital is having trouble controlling their costs.

While, the adequate funding of different health programs is a signal that the reimbursement program is somewhat effective. When you put these different elements together, they are highlighting that there are ineffective financial controls that are in place. This is problematic, because it will cause efforts to stay on top of different reimbursements to become ineffective. At which point, it is only a matter of time until the economic viability of the facility will be brought into question.

The Steps that Can be Taken to Address Financial and Reimbursement Issues The most effective way for controlling costs, is to find out where specific waste and misuse of funds is occurring. This will help administrators to identify those areas where there is a lack of accountability and ineffective controls. Once this occurs, you would then begin seeking out specific recommendations from the different department heads about: how they can control costs and increase productivity.

This will allow us to determine specific tactics that can be utilized on the divisional level to effectively control costs. (Santerre, 2010. pp. 416- 432) The next step is to seek out other sources of outside financing (such as grants). These can be used to help modernize the facility and provide funding for new programs that are in demand. This will allow the hospital to be able to finance and expand the different services that they are providing. Over the course of time, this will help to increase demand within the community.

While at the same time, it is able to keep the underlying costs manageable. This when the hospital will begin to: address the various financial challenges and cost controls that they are facing. (Santerre, 2010. pp. 416- 432) To improve the reimbursement program, the hospital could look at: the outsourcing these services to third party billing companies and collectors. This will reduce the staff costs and it will increase the effectiveness of this program by: having these organizations focusing on helping the company to maximize its profits.

This is important, because if this kind of approach can be taken it will ensure that any kind of reimbursement.