Financial Management: A Crucial Factor for Quality Healthcare - Essay Sample

Introduction

Many studies that have been conducted indicate that there is a strong correlation between proper financial management and the quality of health care offered. I agree with the fact that an organization with efficient financial management has better records. Similarly such organizations also register improved patient care as well as realize high marginal revenue. If an organization can account for every single amount of money spent, it means it has achieved its set goals and objectives, which in turn translates to high revenue collected and customer satisfaction (Asika et al., 2017). In many organizations, there are inadequate policies that can ensure proper calculation of information regarding the cost of care of their patients. As such, therefore, it becomes challenging to ascertain whether they are incurring loss or not. For these organizations to realize profits like any other, they must implement strategies that are cost-effective so that they can understand resource utilization by the service center, variance of clinician practices, and the cost per patient.

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Hospitals that have been identified with better service delivery have cost-effective policies in all activities the organization does. Having financial know-how enables the management to understand the critical components regarding operational expenses enabling the facility attains a value-based care model (Keel et al., 2017). Cost analysis in an organization is fundamental because it helps the healthcare facility to optimize its service delivery system in a given subspecialty (Rubin, 2017). In essence, hospitals must fully implement cost analytics so that it can successfully achieve significant improvement to effectively manage costs to improve outcomes. Cost analysis in healthcare is prevalent in a privately owned hospital; that is why they realize high revenues and offer high-quality services.

References

Asika, E. R., Chitom, J. A. R., & Chelichi, I. F. (2017). Appraisal of human resource accounting on profitability of corporate organization. Economics, 6(1), 1-10. Retrieved from: https://www.researchgate.net/profile/Raymond_Ezejiofor/publication/320425046_Appraisal_of_Human_Resource_Accounting_on_Profitability_of_Corporate_Organization/links/5a9497680f7e9ba42970ceba/Appraisal-of-Human-Resource-Accounting-on-Profitability-of-Corporate-Organization.pdf

Keel, G., Savage, C., Rafiq, M., & Mazzocato, P. (2017). Time-driven activity-based costing in health care: a systematic review of the literature. Health Policy, 121(7), 755-763. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0168851017301240

Rubin, G. D. (2017). Costing in radiology and health care: rationale, relativity, rudiments, and realities. Radiology, 282(2), 333-347. Retrieved from: https://pubs.rsna.org/doi/pdf/10.1148/radiol.2016160749