Financial transparency and capital planning in Veterans Affairs budget processes

Financial Negotiations for Healthcare

It appears that of the suggestions offered by the various authors in consideration of this particular question, the concepts which yield the greatest insight into creating an improved budget process are those pertaining to financial transparency. These notions are primarily advocated by Rose, although some of the other authors address various aspects of this topic as well (McVay and Cooke, 2006, p.101-102). However, I know that financial transparency has rarely been present at the organization for which I currently work. Moreover, I believe that the "mystery" (Rose, 2014) of the financial situation and how finances are allocated amongst the various departments has negatively impacted the overall budget process at the VA. Additionally, it is beneficial for the stakeholders to be aware of the budgetary process and how relevant financial information -- not copious amounts of data -- can affect both departmental needs and the way representatives from those various departments go about pursuing those needs. In particular, Rose's tenet (2014) of the need to "benchmark performance transparency" seems particularly apposite for my organization, which largely operates as a bunch of independent silos. It is time to task stakeholders with greater fiscal responsibility.

2. Of the suggestions offered by the health care executives in the Clarke article, the concepts that give me the most insight into creating an improved Capital Planning process were espoused by Joe Byorick. He actually advocated a standardized process that was imbued with a degree of flexibility that would likely meet the needs of the organization for which I work. That standardized process of gathering capital is largely facilitated by vice presidents taking requests and gathering the information that is reviewed by those in finance. However, when there are special projects or capital needs that exceed the ordinary, the organization if flexible enough to let the vice presidents work directly with upper level management and "a team of management and staff leadership, as well as key members of the medical staff" (Clarke, 2004, p. 81). The fact that there is not one 'cookie cutter' process for obtaining capital is certainly desirable, and the synthesis of efforts across positions and the medical facility certainly seems beneficial as well.

3. I could use discounted cash flow analysis concepts at the organization in which I am employed in a couple of different ways. Firstly, I could utilize such an analysis to gain an intrinsic valuation of the organization and all of its assets. Those assets are both valued in the future and at present, with the cash that is valued in the present naturally taking priority over that which is projected to be in the future. Using such an analysis would enable me to determine which resources are the most valuable and require further investment, as well as to see how much more investment the various resources of the organization are actually worth.

4. It unambiguously appears that the most viable means for effecting a desired outcome in negotiating regarding budgetary affairs in my organization pertains to the notion of an income statement. In many ways, income statements are the diametric opposite of expense statements, in that they identify where exactly finances are coming in from, and how those actions are actually achieved. According to Rose (2014), "The income statement measures the return for each dollar spent and is therefore the most important statement to understand for those carrying out the daily tasks of the organization." Thus, the income statement is an extremely valuable tool for utilizing in negotiations, because it denotes just how money can be used the most prudently to actually bring more money to an organization. If I was privy to this information for the job at which I work I could easily see which areas actually warrant additional financing. Moreover, if such information was readily distributed around the organization in an expression of financial transparency others could see this relationship also. People could thus have more intelligent stances about funding for their departments and how to best maximize that funding in order to benefit the organization as a whole. It is critical for those involved in the budgetary process, then, to have access to income statements.