Report Sample on Management Concept in Health Care

Introduction

Every organization has various projects and daily operations that need to be accomplished to achieve its strategic plan. In health care facilities, the medical personnel and other staff perform their daily duties to achieve the organizational goals. Monetary compensation is provided to them as a way of motivating them to perform their duties. Hence, the management requires controlling the entire organization project and ensuring that they are feasible (Nowicki, 2015). Poor management can expose healthcare facilities to a significant financial crisis. All the resources need to balance to ensure that the healthcare facilities are operational to cater to people's needs. This paper will discuss the healthcare organizations' structure and the procedure they use to leverage Medicaid and Medicare payments. Additionally, it will discuss the reimbursement model that explains management and operations' implementation concepts to solve the financial crisis. An organization is said to achieve its purpose if it meets its strategic objectives.

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The Structure of the Healthcare Organization

An organization requires establishing a structure, which indicates every shareholder's rank working or associated with it. Lincoln Family Clinic is a healthcare organization that is amid the financial crisis. It is expected to pay the liabilities out of the little cash it has at hand. The income from incoming patients cannot manage to finance all the liability. An organization structure review can significantly help the organization in resolving its problem. The management has to ensure that every employee in the organization is assigned specific roles (Nowicki, 2015). The structure helps in organizing the employees based on their specialization. Financial feasibility must apply during the process to create a balance of the healthcare organization's expenditure, income, and profit.

As an administrator to Lincoln Family Clinic, I would advise the management team to revisit the structuring process. It will help in identifying unnecessary roles in the organization to cut costs. It should ensure that there is a governing body in the organization structure. The governing body of a health organization is entitled to significant development, maintenance, and utilization of all organization resources (Nowicki, 2015). It delegates the authority for duty accomplishment by employees, and the governing body monitors the performance of the organization's CEO. It assigns various committees, such as the finance committee. The financial committee is assigned the duties of monitoring the financial performance of an organization. Lincoln Family Clinic should emulate this procedure to identify the problems that fail in meeting financial objectives. Therefore, the Lincoln Family Clinic structure requires an amendment where necessary to eliminate future financial crises.

Medicare and Medicaid Payment Leveraging

Medicare lies under the Social Security Amendments, a program funded to provide health insurance to Americans at 65. It was later adjusted to include the individuals living with disability at the age below 65. They have to qualify for Social Security benefits for them to be eligible for Medicare services. The financing of Medicare has evolved since the year 1966. Initially, the leveraging of Medicare was conducted by the employer's assessment for Part A and Part B. Part A involved 0.35% of all payroll, adding up to $6500, and $3 per month were paid by Medicare beneficially each month for Part B. The year 1967 marked the first full year of the Medicare program; it resulted in a total expenditure of $4.2 billion.

In 2010, the leveraging was conducted from three significant sources: 40 percent from general revenue, 38 percent from payroll tax contribution, and 13 percent of the payments from beneficiary premiums (Nowicki, 2015). Part A is leveraged through 2.9 percent of the total tax imposed on earning and part B is leveraged through 72 percent of general revenue. Twenty-five percent of premiums and 3 percent of the interest. Part D payment is obtained from 74 percent of the general revenue, 13 percent of the beneficiary premiums, and the rest from Medicare payments by beneficiaries eligible for Medicaid.

Medicaid is a social security amendment covering individuals who can cater to their normal expenses but cannot afford the healthcare expenses. The eligibility for this health insurance has been based on two federal cash assistance for a long time. They two federal assistance programs are AFDC and Supplemental Security Income. The leveraging of this health insurance is categorized into two costs. The first cost involves the cost of services providers determined by a formula (Nowicki, 2015).

The second category of cost is based on administrative services. The state and federal governments share the costs for administrative services evenly. The state portion has to be 40 percent or more. The two medical insurance covers are essential to the healthcare organization. Figure 3 in the exhibit section illustrates the increase in total Medicare and Medicaid Expenditures from 1968 to 2015. Lincoln Family Clinic needs to mobilize a larger group of people to register for the health insurance cover. It helps in boosting the revenue, thus resolving the financial problem it is experiencing.

The Reimbursement Model

The health insurance beneficiaries receive medical services at various healthcare organizations and are later reimbursed on the cost incurred. From 1966 to 1983, Medicare Part 1 conducted a reimbursement to the healthcare organization based on retroactive. The federal government funded the reimbursement process. Medicare identified that hospitals had been charging more than it costs for a specific service. Therefore, the hospital has reimbursed a percentage of the cost at the time of service delivery (Nowicki, 2015).

The hospitals were required to undergo a Medicare certification visit or pass a Joint Commission accreditation visit. The measure was meant to ensure that the healthcare organization maintained high-quality services. The physician increased the service cost for Medicare patients, thus charging more than the service costs (Geiger, 2012). In 1982, President Ronald Reagan launched a reimbursement reform in his TEFRA. The diagnosis-related group's prospective payment rates were included in the reform amendments that occurred later. The healthcare organization that provided services at a lower cost than the established DRG rates realized a profit, whereas those offered services at a higher cost than the established DRG rates realized a loss. Medicare used the DRGs in the provision and determining the incentives and penalties (Pope, 1989).

Medicaid serves as a vendor payment program where the state directly performs the reimbursement of providers. The state contains some significant authority over the reimbursement rate and methods only in three exemption. The first exemption occurs when the total reimbursement cannot exceed the cost paid for a similar service covered by Medicare (Nowicki, 2015). The second exemption applies to hospice services, where Medicare reimbursement must be higher than Medicaid reimbursements. The last exemption applies where DSHs are exempted from the Medicare limit. Lincoln Family Clinic should adhere to the appropriate reimbursement model without violating any terms to avoid penalties. The penalties can result in a financial crisis. The incentives associated with the health insurance cover should be careful about delivering its services to the patients covered by Medicare and Medicaid.

Conclusion

It is the organization's management mandate to make a better financial decision that does not put the organization at a financial crisis. Healthcare organizations need to better plan how their operations will be conducted to achieve the strategic goals. The organization structure determines how the duties are distributed among the employees in an organization. Therefore, creating a better structure enables an organization to become more competent. The governing body is responsible for managing, distributing, and controlling the organization's resources structuring to solve financial problems. Health insurance interventions and the criteria used in leveraging is essential to all healthcare organization. They can benefit from the incentives associated with the reimbursement process, thus gaining financially. However, if healthcare organizations violate the reimbursement model, they can incur losses. Therefore, the healthcare organization's financial management should be well planned and effectively conducted.

References

Geiger, N. F. (2012). On tying Medicare reimbursement to patient satisfaction surveys. AJN, American Journal of Nursing, 112(7), 11.
https://doi.org/10.1097/01.naj.0000415936.64171.3a

Karuppan, C. M., Dunlap, N. E., & Waldrum, M. R. (2016). Operations management in healthcare: strategy and practice (pp. 1-10). Springer Publishing Company.

Nowicki, M. (2015). Introduction to the financial management of healthcare organizations: Medicare and Medicaid (6th ed., pp. 96-107). HAP/AUPHA, Health Administration Press.

Nowicki, M. (2015). Introduction to the financial management of healthcare organizations: Strategic & operational planning (6th ed., pp. 263-278). HAP/AUPHA, Health Administration Press.

Nowicki, M. (2015). Introduction to the financial management of healthcare organizations: Organization of financial management (6th ed., pp. 31-36). HAP/AUPHA, Health Administration Press.

Nowicki, M. (2015). Introduction to the financial management of healthcare organizations: Financial management in context (6th ed., pp. 1-36). HAP/AUPHA, Health Administration Press.

Pope, G. C. (1989). Hospital nonprice competition and medicare reimbursement policy. Journal of Health Economics, 8(2), 147–172.
https://doi.org/10.1016/0167-6296(89)90001-5Exhibit.