Resource allocation processes and types in health care organizations

Healthcare Resources

Allocating Healthcare Resources

Allocation of Healthcare Resources

It may seem that the resources that a healthcare organization has at its disposal is contained in a very small list, but for proper allocation of total resources every possible thing has to be considered. Resources refers not only to the money that a business has on hand, but the people, buildings, land, recruitment of people, retention and finances. An organization is the sum of all of its parts and must operate within the framework of those resources. How those resources are allocated is an important function of the control of the organization also. This essay will discuss the resource acquisition and allocation processes in a healthcare organization with specific emphasis regarding those processes in allocating financial, operating, capital, human, recruitment, and retention resources.

Resource Acquisition and Allocation

In one aspect a healthcare organization is no different from any other organization depending on type. Healthcare businesses can be either for profit or nonprofit organizations and these two types have different internal functions, but, as far as the basic functions of the organization are concerned, it does not matter whether this is a healthcare concern or a company that trades in any type of service or widget. The basic financial accounting, and other aspects of resource allocation are the same.

Acquisition of resources is a process that requires that the organization is always looking for ways to improve its processes. This means that since acquisition is the initial step in obtaining the resource, the many ways that this can be accomplished need to be examined. Healthcare organizations are generally limited as to operational funds. Thus, the officers of the organization need to discover the most cost effective means of acquiring resources and in the acquisition they need to find the most cost effective resources that will meet their needs.

One example is the process of acquiring human resources to staff the organization. The text (Longest & Darr, 2008) describes the process required for acquiring these human resources. First, the organization must have a method of profiling that has been predetermined. "The strategic plan, anticipated demand for services, changes in professional practice or labor supply, and staffing for new technologies are considered in making projections" (Longest & Darr, 2008, 445). The second step is estimating the staffing that will be required in the future. Next the organization must inventory the talent that they currently have available to them through the people already employed. From the known information and an estimate of what will be needed, managers can then forecast the need for staff. The final step in this process is planning for how the organization will meet future staffing needs (Longest & Darr, 2008, 433-435). The organization follows a similar plan to acquire other resources (physical, human, financial) that it will also need. A plan for the acquisition of resources is an essential aspect of any organization.

Allocation of those resources is also a part of the plan. After the resource, no matter what that entails, is acquired then it needs to be sent to the area of greatest need within the organization. Looking at human resources again, if there is a shortage of CNAs to adequately staff a section or shift in a nursing home, then the plan for acquisition should be quickly able to fill that need. Again, whatever the need there should be a plan in place to fill it. The next sections of the paper look at specific resources within a healthcare organization to determine how they are allocated.

Financial Resources

Financial resources can come from many different sources and are needed to maintain the health of the organization. It has been said that the job of a business is to make money. While this statement is true to some extent (though not of primary concern for a nonprofit), a healthcare organization may set its priorities differently. Finances are a means to an end within the organization and they serve as a help to meet the ultimate goals of the organization.

Most healthcare organizations acquire capital through insurance payments and through the payments made by individuals. Health insurance organizations have requirements that must be met and scheduled payouts for specific services. This allows the organization to plan for financial return that they will receive based on past procedures. Other organizations rely on acquisition of financial resources through government agencies. Depending on the population served, an agency will make payment based on the service provided. The financial payments received from individuals are generally very small compared to those received from insurance and government entities.

One of an organization's primary financial considerations is budgeting and costing. Budgets are a common way for the organization to control the input and output of financial resources that are required of an organization (Longest & Darr, 2008, 466). "They serve a dual purpose. First, they are numerical expressions of plans, and second, they become control standards against which results are compared" (Longest & Darr, 2008, 466). This means that the organization will use the budget to determine how well the firm is following its stated plan and also to see how well it is progressing as compared to previous cycles. Costing plans are one method of comparison that many companies use.

Operating Resources

This can be seen as a more overarching set of resources than just the strict financial. Operations require not only the financial resources, but the physical and the human too. For an organization to operate efficiently, it must first have a plan that answers all contingencies (Longest & Darr, 2008, 434). This speaks to all of the controls that an organization has set in place. Regulations require certain standards that must be met; staffing requirements may be specific and expensive; the physical spaces for healthcare organizations have stringent controls. All of these operating needs have to be thought out by the managers of the healthcare organization and allocation of the proper people and facilities have to be a part of the plan.

Capital Resources

The managers or officers of an organization have to understand the restrictions placed on their organization first before an appropriate plan can be put in place. Allocation of resources has to be determined in a way that will create their most efficient use. An RN may not be required for certain operations in which he or she has been previously used. Degree of training is a huge consideration because an RN is costly to maintain in many situations. This is the same whether the resource is a person or a machine. If the job can be done properly for a lower cost, then the organization must be able to allocate the proper resource to that operation. Efficient running of an organization means that it will be able to continue operating. This is especially true for a healthcare organization in which the margins for profit are very small.