Financial Strategies of Healthcare Organization

Develop a financial strategy for using global nursing strategies to increase fiscal responsibility. Include the positive and negative financial impact of bringing foreign healthcare providers into a financial organization. Examples such as physicians, nurses, and therapist should be evaluated and assessed for financial viability.
Healthcare institutions may be faced with fiscal constraints at some point in their growth process therefore necessitating austerity measures and sound business practices that will help minimize costs and enhance operational and financial efficiency inside the hospitals (Dong, 2015). Many questions arise as to how the financial management culture in healthcare institutions can influence care quality. This research paper attempts to identify the global nursing strategies that would increase financial responsibility in healthcare institutions as well as the financial impact that hiring foreign healthcare providers into the financial organization has.
According to Dong (2015) there is a significant statistical relationship between the financial performance of a hospital and the quality of healthcare the hospital provides. The profitability of the hospital, operating efficiency, asset liquidity, costs, and financial leverage are important determining factors to the quality of healthcare. Generally public hospitals offer lower quality healthcare compared to the nonprofit hospitals (Dong, 2015). Similarly, urban hospitals often report better healthcare quality compared to the hospitals situated in the rural areas. In specific terms, results from the research conducted by Dong (2015) reveal that treatment quality for the cardiovascular patients increased in the subsequent year following a growth in the labor costs, financial leverage, and profitability of the hospital.
The outcome of the research by Dong (2015) suggested that when the hospital makes greater profits, has greater abilities for financial investment, and paid better wages as an apparent way of attracting more professional nurses, the hospital would have its care quality improving. The desire for better profits drives hospitals to strengthen their quality and quantity of services offered. This implies that hospitals that have poor financial standing needs better monitoring and better fiscal strategies to strengthen their quality of care.
Financial strategy for using global nursing strategies to increase fiscal responsibility
Collaboration: By nature nurses are known to be collaborative more so when providing care to patients. Team based healthcare provision is encouraged by American Nurse Today (2008) as well as partnerships with families. There is value in collaboration. This is because collaboration allows the nursing community to have a broader view and to minimize the chances of having communication breakdowns (American Nurse Today, 2008). This is very true as well for nurses who ought to be good financial stewards for their healthcare institutions. In order for a nurse to be a progressive financial steward they ought to embrace collaboration with nurse colleagues serving in the finance department. Apparently the nurse managers may appear not to be likely allies but in real sense collaboration between healthcare personnel serving in the finance department and nurses can help improve the healthcare institution’s bottom-line and patient outcomes (American Nurse Today, 2008).
The global economy is faced with uncertain times. There is also an increasing healthcare reimbursement threat from the insurers. For these and many more reasons nurses are required to be prudent enough in ensuring that colleagues serving in the finance department are not strangers but allies to them. This can only happen if both parties appreciate the fact that money ensures that healthcare is healthy as Dong (2015) would find in his research. Money helps healthcare institutions buy high-tech and progressive technology. It helps build better facilities in place of the crumbling and old fashioned structures elected half a century ago during the prime of American hospitals. Money pays benefits and salaries to the healthcare staff.
The nursing community is already beginning to get acquainted with financial literacy with increasing knowledge is areas such as CMI adjusted length of stay, conditions existing on admission, profit margins, cost versus reimbursement, and case mix index (American Nurse Today, 2008). Most nurses would know that financial instability in the healthcare institution would affect their earnings as well as the budget with which the employer operates (American Nurse Today, 2008). Increasing costs of fuel and supplies is bound to increase the cost of operations in the hospital institution. As the healthcare institution struggles to keep up with the increasing costs of operation and struggle to remain in business, the benefits and salaries due to the healthcare staff may fail to grow over a long period of time.
The staff often account for the largest chunk of expenses in many healthcare organizations (American Nurse Today, 2008). This would mean that nurses’ expenses are quite high in hospitals. On the flipside the nurse is one of greatest assets any hospital would have. The nurse is in essence the holder of the key to better efficiency and outcomes in the hospital. With better efficiency and outcomes the finance department of the hospital will have an easier time budgeting. This is because better efficiency and outcomes would mean cost effectiveness and little to no loss of financial reimbursement in the payment for performance matrix (American Nurse Today, 2008). The nurse has to do much more than remain a valuable asset to the hospital. They have to make their value tangible. Any prudent nurse would know where wastage is and would be an integral part of helping the healthcare institution eliminate waste and alleviate adverse and complicated healthcare outcomes. It is this knowledge by the nurse that makes them quite powerful and precious to the healthcare institution. The most important competitive compensation leverage is the demonstration of value.
The nurse is capable of understand the necessity of care and compassion towards patients and the need to handle any physiologic issues with patients. The finance department staff will be conscious of the need to gather the monies owed to the healthcare institution and maximize the financial health of the institution. This shows that both the nurse and the finance department staff view the hospital facility in different perspectives and rightly so by virtue of the position they hold (American Nurse Today, 2008). The objective of a sound financial strategy is not to change the perspective held by the financial colleagues but to assist them in appreciating and understanding the challenges faced during patient care. If the nurse believes that the decisions coming from the finance department are limiting their ability to access critical resources or where the finance department staff think that the nurse does not appreciate the costs or budget then the hospital will not benefit from the synergy created through collaboration (American Nurse Today, 2008).
The nurse is a clinical leader who is bound to make fundamental financial decisions on a daily basis. Resources in the healthcare institution are always aligned with existing budget. The hospital is bound to seek prudent ways of alleviating wastage through the reduction on cost of supplies and through the improvement of processes (American Nurse Today, 2008). With the selfless input from the nurse they become valued financial stewards in the institution. Now more than before, healthcare institutions are struggling financially to provide uncompensated care. The likelihood of attending to uninsured patients having refused care may be heartbreaking although provision of care as a way of showing compassion to such patients can also negatively affect the budget of the hospital institution (American Nurse Today, 2008).
A greater proportion of people who have permanent disabilities and require extended care do not have the necessary family resources and insurance to do so, they do not also meet the requirement for Medicaid, are quite sick to even consider sending them home, and some of them do not even have homes. For a nurse, denying any patient care and compassion is not imaginable. There is no ethical solution to this. The only outcome for such situations is the difficulty the hospital is put in in terms of financial challenges. Through data sharing, open communication, and sharing experiences between colleagues the financial staff and the nursing community can assist one another in this respect. With appreciation and mutual respect the hospital facility can conquer the challenge of achieving fiscal accountability and outstanding patient outcomes.
It is a common saying in healthcare industry that healthcare is a business. There is increasing pressure to minimize costs in healthcare in the U.S. owing to the fact that healthcare spending per person has skyrocketed (American Nurse Today, 2012). If not checked healthcare costs can rise in even further to unmanageable levels. Sound financial management strategies are fundamental in every healthcare environment. Whether it is in the not for profit or the for profit institutions or in the publicly funded institutions austerity measures and financial prudence is mandatory. In order to master the adequate resources needed for operations and staffing nurses have to become more prudent and financially informed in comprehending healthcare costs (American Nurse Today, 2012). Healthcare payment in the U.S. is quite complex. It entails government agencies, insurance companies, and personal payment from healthcare consumers. Private insurers and individuals pay for an excess of half of the total costs of healthcare in America (American Nurse Today, 2012). Through Medicaid, Medicare and the veterans’ affairs department, the government becomes the single largest healthcare payer.
Payment for performance
In the recent past healthcare reform discussions have paid particular attention of how healthcare costs can be minimized. In history hospitals and healthcare providers have received payment relative to the volume of healthcare provided (American Nurse Today, 2012). With the Affordable Care Act (ACA) this system is slowly changing (Vincent & Reed, 2014). The payment incentive is gradually shifting from volume based payment to a more healthcare outcome and service value based payment system with the inclusion of fewer hospitalizations. With the new dynamics there is increasing demand on hospital managers and nurse leaders to enhance efficiency, improve patient outcome and quality of care. Reimbursements are now closely linked to performance including patient experience most of which are closely linked to the nurse (American Nurse Today, 2012). This ACA supported value based reimbursement trend in hospitals can only succeed with the support of nurses.
Bottom-line and outcomes
A nurse has to be cognizant of the way the outcome of patient care influences the financial outcomes of their employer. For instance in the year 2013 most hospitals in the U.S. lost Medicare reimbursements due to the fact that most of the patients they treated were readmitted in the space of 30 days after they were discharged (American Nurse Today, 2012). When the nurse is able to understand the bolts and nuts of budgeting per unit level, they will be able to get more involved and motivated in the reduction of costs (Fawcett, 2013). Each of the nursing units makes up the entire organization with respect to business management and the comprehension of the entire hospital spectrum. The sustainability of the hospital mostly depends on the expertise and knowledge of qualified nurses for management purposes.
Unit budget items
The annual budget is a plan that entails the objectives and goals of the organization. The budget details all the revenues, expenses planned for the year, and helps to guide the hospital institution in the utilization of material and human resources (Fawcett, 2013). With prudent budgetary planning it is possible for any institution to achieve its financial goals. For the hospital it is possible to realize financial objectives and at the same time ensure that every patient receives cost effective and quality healthcare services. In the process of budget planning, revenue and expense are projected, compared and reviewed. If there is no balance then the budget will be revisited to find prudent ways of reducing expenses without harming services that would help the organization make better revenues (Fawcett, 2013). Any healthcare institution uses different budget types including capital budgets and operating budgets for the monitoring and planning of their financial standing. An operating budget directly impacts the nurse since they are the ones who are the immediate contact with patients and would ordinarily know patient needs for quality services and care on daily basis.
Each unit in nursing is understood to be a cost center. Every one of the units is allocated some operating budget. The major ingredients of the operating budget include expenses and revenues (Fawcett, 2013). Operating budgets will oversee expected daily activities, personnel, supplies, and resources for a typical period of more than a year. Revenue comes from charges. This are monies credited to the organization from patient visits, Medicare monies from impatient hospitalization, procedures, private insurers, Medicaid, or monies paid by patients themselves (Fawcett, 2013). It is true that all charges are not fully settled. Some will be discounted subject to the entity or person making the payment. A good number of insurers will pay flat rates for inpatient stays. Budget revenues for every nursing unit is forecast based on days spend by the patient or based on daily census (Fawcett, 2013). Nursing services may not be revenue makers instead they are included in the broad charges and overall room.
Some of the expenses in the hospital include supplies, nursing staff costs, other items employed in the daily running of nursing units. There are two primary categories of expenses in nursing and they are non-salary, and employment cost expenses (Fawcett, 2013). Employment costs as stated before form the largest portion of each unit budget and they include wages and salaries for employees, contracted staff, overtime payment, holidays, benefits, in-service sittings, education, orientation, and shift differentials (Fawcett, 2013). The non-salary expenditure entails the medical supplies employed for the care of patients including dressing and I.V tubing, syringes, equipment rentals, office supplies, restock of medication in the pharmacy, equipment maintenance and repairs, and education travels by staff members.
Input of nurses in reducing costs of healthcare
After the approval of unit budgets it is important for the budget to be monitored in order to make sure that the expenses remain within the forecast limits. A nursing manager is responsible for providing the finance department with actual expenses (Roussel, Harris & Thomas, 2015). The actual expenses information reveals any differences between what was projected in the budget and the actual expenses. The difference is commonly referred to as the variance. The nurse unit manager will put in effort to modify the expenses and make up for the variances making sure that every department remains within the budgetary limits through controlled expenditure. The nursing profession as earlier alluded to is the largest group in any hospital and often the greatest in terms of expenditure. Nurses can play important roles in assisting to minimize cost.
Based on patient acuity and unit census, targeted HPPD (Hours per Patient Day) are assigned. Whenever the nursing hours surpass the required HPPD for the patients the nursing manager will be ordinarily required to forward a report with an explanation for the incidence. Any nurse manager can be a fundamental player in the unit budget by way of using appropriate staffing for each unit, by way of avoiding unnecessary unscheduled leaves that necessitate overtime for other staff members, and by way of supervising the application of available supplies (Roussel, Harris & Thomas, 2015). With growing patient numbers and diminishing healthcare reimbursement patients may be unable to meet their payment requirements in healthcare. This makes the nurses to have to achieve more with fewer resources. Overcoming these challenges requires a lot of innovativeness and collaboration with other staff. Through support, determination, and involvement nurses can assist in ensuring that patients get the best quality healthcare and promote the financial viability of their institutions.
Positive and negative financial impact of bringing foreign healthcare providers into a financial organization
Financial institutions will often have deficiency in talent and skilled professionals. Finding, hiring, and retaining the best minds is becoming quite difficult. Staffing challenges in any institution can be detrimental in any organization effectively limiting the reliability and responsiveness of the institution when handling emergency situations, and customer demands. Lack of appropriate staffing proficiencies can also create risk and compliance vulnerabilities (Donaldson, 2017). With outsourcing, this can be a positive strategic move that will help the organization supplement their internal resources and address the skill gaps in the organization while at the same time strengthening the core processes of the business. Financial institutions are increasingly utilizing outsourcing strategies in the areas of financial investigations, information technology and internal auditing (Donaldson, 2017).
With Information technology outsourcing most healthcare organizations are finding it fit to outsource cloud technologies, develop superior mobile applications, and enhance expertise in customer patient support services. For healthcare data security and patient safety is a big thing. Patient information must be held in confidence and be retrieved to the benefit of the patient or with their consent. In order to synchronize digital information across various departments in healthcare the hospital management may consider outsourcing. Healthcare institutions can outsource IT experts during the development and implementation of their IT infrastructure. Some institutions will keep an entire IT department to take care of emergency system issues and for general continuous IT infrastructure maintenance services.
In the healthcare context outsourcing is bound to have fundamental benefits especially for the institutions that would find it difficult to hire professionals (such as radiologists, cardiologists etc.) on a permanent basis. Some of the benefits of outsourcing as a way of improving financial performance of the institution include: Costs reduction, improvement of services and stimulation of growth, and alleviation of stress on the scarce internal resources (Click & Duening, 2005).
Cost Reduction: By outsourcing the healthcare institution is bound to save on monies that would otherwise be spent on oversight, billing, recruitment, training, and risk mitigation. With outsourcing man hospitals can benefit from the large pool of professional providers who are well acquainted with the common goals and processes of the emergency department.
Improvement of services and stimulation of growth: This entails promotion of quality of healthcare in the healthcare institution by ensuring that patient safety, care continuity and patient experiences are made a top priority. Through outsourcing the overall quality of care and reputation of the healthcare institution through the practice of competence based clinical activities is enhanced. With competent clinical officers, physicians, nurses, and therapist the goals of patient care are achieved and patients receive outstanding experiences through the skilled strategies and tactics employed by the healthcare professionals outsourced.
Alleviation of stress on the scarce internal resources: Through outsourcing of accounting functions the healthcare institution can benefit from centralized physician billing, centralized credentials, professional billing and fee coding. Outstanding physician leadership with national experts support is another direct benefit for the healthcare institution.
Other financial benefits of bringing foreign healthcare providers into a financial organization include alleviation of critical mistakes in the organization, access to trained, skilled and expert healthcare professionals, alleviation of training costs, ample time to ensure that more attention is given to enhanced patient care, alleviated costs while at the same time ensuring quality of healthcare (Duening & Click, 2005). With outsourcing the business is able to pay special attention to what matters most. In the case of healthcare organizations quality of patient care is what is central. Through outsourcing healthcare providers will have less to do with management and administrative duties and more to do in providing better patient experiences and improving on it.
Even though outsourcing comes with loads of benefits especially on cost reduction it is only easier when practiced on temporary staff for the reason that they don’t have permanent attachment with the organization. Some countries have regulations and rules governing the intellectual property and privacy when it comes to outsourcing beyond the geographical location of the country. Hospital organizations must be keen to examine information/data export regulations. With outsourcing the hospital management must be careful with managing the internal culture of staff and their feelings concerning outsourcing (Harland, Knight, Lamming & Walker, 2005). Most staff members might view outsourcing as a risk to the security of their job. Leaders must therefore be transparent when outsourcing their physicians, nurses, and therapist. The contract detailing the outsourcing agreement must as well be accurate and clear with respect to the responsibilities and roles for which both parties will be playing. The arrangement is bound to fail if there is no clarity on the terms of engagement.
Successful organizations and departments can leverage on outsourcing for competitive advantage only when the outsourcing is managed prudently. There has to be dedicated resources to specifically manage vendor relationships if the outsourcing arrangement is expected to succeed. The primary thing is to ensure that there is transparency in the leadership of each employee equally. With clear communication and sound leadership the arrangement has good chances of succeeding.



References
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