Current Challenges of Healthcare Financial Management

Question: Write an essay on Current Challenges of Healthcare Financial Management? Answer: 1.0 Introduction The term Healthcare signifies maintenance or restoration of health in terms of human body and mind. On the other hand, Financial Management can be defined as a strategy, which usually helps an organization to make strategic decisions regarding financial direction, financial operations and financial performance. In the 21st century, healthcare financial management has become one of the key aspects within the healthcare environment (Canadian Foundation for Healthcare Improvement, 2013). In this regard, rationally it can be argued that in the contemporary era, public health has become most sensitive issue within the globe. In relation to this, it can be mentioned that since after the year 1960, large number of global countries have emphasized towards healthcare system with an aim of enhancing the quality and standard of public health (American Hospital Association, 2011). At the same time, most of the countries government also have emphasized towards healthcare spending and finance allo cation with an intention of ensuring the sustainability of healthcare system. Additionally, it can be argued that through emphasizing towards healthcare financial management, government bodies have wanted to address the challenges of public health (Indian Chamber of Commerce, 2012). According to the viewpoint of Center for Healthcare Governance (2009), in the modern era financial management usually plays an imperative role within the healthcare system, which may influence the overall performance, structure and ambiance of the healthcare environment. In this regard, more specifically it can be argued that with an aim of ensuring the needs and expectations of the public health, global healthcare organizations should need to emphasize towards strategic resource allocation/ best practice principles, which may ensure effective execution of healthcare operation and it may also enhance the values of healthcare services. In this context, more specifically it can be stated that for ensuring the strategic resource allocation, healthcare organizations should need to emphasize towards allocation of capital and prioritizes resources such as workforce, payment system, physician integration, technology and capital planning related aspects (Indian Chamber of Commerce, 2012). In this particular assignment, the objective is to demonstrate the significance strategy of healthcare financial management, which may ensure the best practice approaches for effective financial management within the global healthcare industry. 2.0 Review of Literature 2.1 Current Challenges of Healthcare Financial Management In order to highlight the current challenges of healthcare financial management, it can be stated that modern healthcare organizations have faced several challenges/ issues within the globe due to increasing trend of disease and illness amid the public health. At the same time, it is also identified that healthcare organizations have faced several challenges within its workforce in terms of training, recruitment and retention related problems (American Hospital Association, 2011). Apart from this, payment system also has influenced certain challenges for the healthcare organizations in terms of cost and finance related aspects. In relation to this, it can be argued that healthcare organizations have struggled to ensure its long-term strategic business plan due to its poor physician integration. Additionally, it can be also stated that healthcare organizations have struggled to enhance the qualities, values and standards of healthcare due to its poor strategic involvement and technolo gy alignment. In addition, it can be also mentioned that inefficient resource/ capital planning also has affected the performance of healthcare system, which has hampered the significant growth of global healthcare industry (Center for Healthcare Governance, 2009). 2.2 Importance of Financing Strategies in case of Healthcare System Based on the report of Canadian Foundation for Healthcare Improvement (2013), it is identified that in the contemporary era; healthcare organizations have highly emphasized towards capital-intensive business operations with an intention of ensuring the healthcare allocation of capital and prioritizing healthcare related resources. In this regard, more specifically it can be also stated that large numbers of healthcare organizations have emphasized towards generating sufficient cash flow with an in objective of ensuring the needs and expectations of the patients. At the same time, it can be also stated that through emphasizing towards financing strategies; healthcare organizations have tried to ensure their short-term and long-term business objective. In relation to this, it can be mentioned that within an intention of enhancing the quality, value and standard of the healthcare services, most of the global healthcare organizations have paid their utmost attention towards the workforce , payment system, physician integration, technology and capital planning related aspects (Larkin, 2012). At the same time, it can be also mentioned that healthcare organizations have emphasized towards development of comprehensive strategy within the healthcare system, with an intention of assuring the provision of continued healthcare/ clinical services within the global communities (American Hospital Association, 2011). Over the years, it is observed that large numbers of global healthcare organizations have struggled to ensure the provision of continued healthcare services due to their lack ability and capability of meeting external debt and demand of capital. Apart from this, it is also identified that increasing competition within the healthcare market has influenced numerous challenges regarding debt financing. At the same time, involvement of new equipment and innovative technology has enhanced importance of strategic initiatives amid the healthcare organizations in terms of capital allocation and prioritizing resources. Additionally, physician employment and physician integration also has accelerated need of capital amid the global healthcare organizations. Moreover, it can be also mentioned that emerging value-based healthcare services provisions and advanced payment system requirements have influenced the need of financing strategies within the modern healthcare organizations. In this regard , Dan and David (2007) argued that modern healthcare organizations should need to emphasize towards substantial capital investments with an intention of ensuring the success within the global healthcare organizations (Bharantiharan and Vijayasekar, 2013). 2.3 Best Practice Framework for Effective Healthcare Financial Management Based on the report of Healthcare Financial Management Association (2014), it is identified that in the modern era, larger numbers of global patients have emphasized towards responsible approaches with an intention of resolving the medical accounts in a significant manner. In this regard, more specifically it can be stated that most of the healthcare organizations of the globe have used variable processes for resolving account, has influenced certain challenges for the healthcare patients in terms of confusion and discrepancy. Based on the report of American Hospital Association (2013), it is identified that with an intention of ensuring the best practices operation with the healthcare system, healthcare organizations should need to emphasize towards certain set of principles as well as regulations. The following discussion will highlight the set of principles as well as regulations, which may assist healthcare organizations to ensure the best practice framework within the healthcare industry in terms of financial management (Bharantiharan and Vijayasekar, 2013). 2.3.1 Workforce Based on the viewpoint of Dan and David (2012), workforce is considered as one of the most crucial aspects, which may lead healthcare organizations to ensure the increasing needs and expectations of the healthcare patients. In this regard, more specifically it can be argued that doctors, nurses and other healthcare professionals are considered as the key workforce of healthcare organizations, which may enhanced the services potential of the healthcare organizations through emphasizing towards responsive and ethical approaches. In relation to this, it can be also argued that healthcare organizations should need to emphasize towards financial resources, for generating the salary and payment to its involved workforce, which may ensure the needs and expectations of the existing workforce (Thorntona and Ricea, 2008). Simultaneously, financial resourcing also may enhance the efficiency and involvement of the workforce, which will lead healthcare organization to ensure better healthcare outcome. Thus, it can be stated that through emphasizing towards the financial resource, a healthcare organization may identify as well as determine its necessary capital budget, which may assist healthcare organizations to ensure its sustainability within the healthcare industry and it also motivate healthcare workforce to enhance its productivity and performance in a significant manner. Additionally, it can be stated that through emphasizing towards capital allocation and resource management, healthcare organizations also may enhance the opportunity for its workforce in terms of training and development related aspects. Moreover, it can be mentioned that through emphasizing towards adequate supervision as well as compensation, healthcare organizations may generate quality/ standard healthcare service, which also m ay ensure patient satisfaction (Cuckler et al., 2011). 2.3.2 Payment System Consequently, it can be also mentioned that payment system is considered as one of the key constituents of best practice framework during the execution of healthcare services. In this regard, more specifically it can be argued that appropriate payment system usually help healthcare organizations to ensure the payment of long-term debt and it also assist healthcare organizations to ensure effective cash flow within the healthcare organization. In relation to this, more specifically it can be stated that through emphasizing towards adequate payment system, healthcare organizations may ensure the allocation of capital budget amid the temporary as well as permanent vendors. In this context, Cuckler et al., (2011) argued that through emphasizing towards adequate payment system, healthcare organizations may ensure its treasury management functions. At the same time, it can be also mentioned that through concentrating on payment system, healthcare organizations also may fulfilled the needs and expectations of the healthcare associated stakeholders (Bharantiharan and Vijayasekar, 2013). 2.3.3 Physician Integration According to the viewpoint of Martin et al., (2012), physician integration is also considered as one of the most essential aspects for healthcare organizations, which may assist healthcare organizations to enhance the quality of healthcare services. At the same time, it can be mentioned that better physician integration also may fulfill the expectations of the healthcare patients. In this regard, it can be mentioned that modern healthcare organizations have highly emphasized towards physician integration model, with an aim of enhancing the healthcare potential for the patients. At the same time, it can be also argued that healthcare organizations also have tried to reduce the cost of integration care through emphasizing towards evident based medical practices. In relation to this, it can be also argued that global healthcare organizations have tried to enhance its physician integration with an aim of increasing the efficiency of the healthcare organization. At the same time, it can b e also mentioned that better physician integration has assisted global healthcare organizations to improve its overall resource availability (Eike-Henner, 2007). 2.3.4 Technology Simultaneously, it can be also mentioned that in the contemporary era the involvement of technology has been enhanced in everywhere in an extensive manner, which has influenced the importance of technology in the field of healthcare service. In this regard, Health Service Executive (2013) argued that through incorporation of technological tools and techniques modern healthcare organizations have enhanced the overall quality of healthcare services. Apart from this, it can be also stated that adoption of technology has assisted healthcare organizations to enhance its potential of clinical decision making through the help of evidence based medical practices principles (Kaiser Family Foundation, 2015). Additionally, it can be also mentioned that incorporation of technology has assisted healthcare organizations to keep the record of disease and its additional information, which usually help global healthcare organizations to provide inclusive healthcare services to its patients as well as stakeholders. In addition this, it can be also argued that incorporation of technological tools and techniques may help modern healthcare organizations to practice healthcare operations and services in a cost effective manner. Simultaneously, Martin et al., (2012) claimed that involvement of technology may assist healthcare organizations to reduce the involvement of time during the execution of clinical operation. 2.3.5 Capital Planning According to the viewpoint of Thorntona and Ricea (2008), capital planning is considered as one of the crucial aspects of healthcare organization, which may create an impact on the performance as well as outcome of the healthcare organizations. In this regard, Kaiser Family Foundation (2015) claimed that capital planning/ capital budgeting decision is considered as most essential constituents for healthcare organizations, which usually helps to determine the capacity, ability and commitment of the healthcare organization. In relation to this, it can be mentioned that through emphasizing towards capital planning/ capital budget healthcare organizations may ensure the long-term sustainability within the healthcare industry. At the same time, it can be also mentioned that through incorporation of adequate capital investment strategies, healthcare organizations may ensure its accountable and fair approach towards the healthcare patients. Thus, it can be argued that incorporation of capit al investment strategy may assist healthcare organizations to archive their long-term strategic goal. At the same time, it can be mentioned that incorporation of adequate capital investment strategies may assist healthcare organizations to ensure its future cash flow. Additionally, it can be mentioned that through emphasizing towards capital budgeting process, it is also possible to ensure the monitoring and execution of the capital expenditure. In addition, it can be also stated that adequate capital investment strategies also may assist healthcare organizations to make more effective and efficient clinical decisions (Healthcare Financial Management Association, 2014). 3.0 Compare and Contrast Best Debt Vehicle The term Debt Financing signifies browning money for the other sources in terms of loan. In this regard, more specifically it can be argued that an organization may adopt both short-term debt and long-term debt with an intention of ensuring the financing involved obligations during the execution or practices of business operation. According to the viewpoint of McClellan and Rivlin (2014), short-term debt financing usually signifies a specific financing process, which is required for an organization to fulfill the requirements of working capital. In this regard, more specifically it can be argued that i.e. short-term debt financing; an organization should repay the due amount/ loan amount within maximum of two years of time. On the other hand, long-term debt is usually used by the business organizations to fulfill the requirements of longer payback period. In this regard, more specifically it can be argued that i.e. long-term debt financing an organization should need to repay its loa n/ due amount within the five years of time. In relation to this, more identically it can be also mentioned that through incorporation of long-term debt finance an organization may fulfill its long-term asset related requirements (Management Stratagems Group, 2011). In order to compare and contrast the both debt vehicle, it can stated that in case of healthcare industry, healthcare organizations should need to incorporate long-term debt financing approach as it may usually help healthcare organizations to mitigate healthcare finance management related risk. In this regard, rationally it can be stated that long-term debt financing approach may assist healthcare organizations to payback its long-term debt in an effective manner, whereas it can be stated that through adoption of short-term debt a healthcare organization only may get benefited during its maintenance of working capital and cash flow (McNally et al., 2013). On the contrary, it can be argued that short-term debt financing approach may initiate challenges for a healthcare organization in terms of long-term capital needs and requirement. In this context, U.S. Department of Health Human Services (2015) argued that through incorporating of long-term debt financing approach; healthcare organizations may ensure its stable execution of financial operations. At the same time, it can be also argued that long-term debt financing approach also may assist global healthcare organizations to ensure its growth potential for future within the healthcare industry through ensuring capital structure and profitability. Additionally, it can be also argued that adoption of long-term debt financing approach also may help healthcare organizations to improve its other qualitative factors such as transparency, credibility and integrity among others. In this context, it can be also argued that through incorporating long-term debt financing approach healthcare org anizations also may enhance the flexibility of its financial management (Utica College, 2015). Thus, it can be stated that through incorporating long-term debt financing approach healthcare organizations may enhance its overall services potential within the healthcare industry. In relation to this, it can be mentioned that through emphasizing towards long-term debt financing approach healthcare organizations also may ensure its capital planning/ capital budgeting principles, which will assist healthcare organizations to pay attention towards its existing workforce, payment system, physician integration and technology and investment related aspects (Cornue, 2007). 4.0 Recommendation of Best Practice Approaches for Effective Financial Management within the Healthcare Industry Based on the above discussion, it is quite evidently identified that financial management is considered as one of the most key constituents, which may influence the overall performance and structure of the healthcare organizations. In this regard, more specifically it can be argued that through emphasizing towards financial management in terms of allocation of capital and prioritizing resources, global healthcare organizations may enhance the opportunity, values, quality and standards of the healthcare services. At the same time, it can be also stated that through incorporation of comprehensive financing strategy, global healthcare organizations also may enhance the future growth potential during the practice/ execution of healthcare operations (Bader, 2009). In this regard, more specifically it can be recommended that healthcare organizations should need to emphasize towards financial control, financial budgeting and processing of financial operation, which may assist healthcare organizations to ensure the cash inflow and outflow with the healthcare industry (Med Synergies, 2015). At the same time, it can be also stated that through incorporation of financial strategy, healthcare organizations may execute administrative as well as managerial operations/ activities of the healthcare and clinical services. However, it can be also asserted that through incorporation of financial strategy, global healthcare organizations also may enhance the quality of its monitoring and governance related aspects, which will also assist healthcare organizations to ensure its effective operation within the healthcare field. Simultaneously, it can be also mentioned that through emphasizing towards the financial strategy, global healthcare organizations also m ay reduce its numerous challenges in terms of cost and finance related aspects (Cleverley et al., 2011). 5.0 Conclusion Thus, in order to conclude the topic, based on the above mentioned evidences it is revealed that for ensuring the best practice approach within the healthcare organizations, it is essential to incorporate long-term debt financing approach, which may ensure the success of healthcare organization within the operating industry. However, it can be also mentioned that allocation of capital and prioritizing resources may reduce the challenges for healthcare organizations in terms of workforce, payment system, physician integration, capital budgeting and technology related aspects. Thus, it can be stated that through incorporation of financial strategy, healthcare organizations may ensure effective governance process within the healthcare organization and it also help healthcare organizations to improve its integrity, transparency and credibility of the healthcare operations. 6.0 Reference List Cleverley, W.O., et al. (2011). Essentials of Health Care Finance (7th Ed.). Columbus, OH: Jones and Bartlett Learning. Med Synergies, (2015). What Physician Alignment Means To the Patient. About Us. [Online] Available at: https://www.medsynergies.com/thought-leadership/physician-alignment-means-patient [Accessed 14th September, 2015]. Bader, B. S., (2009). Clinically Integrated Physician-Hospital Organizations. Reprinted From Great Boards, pp. 1-12. Cornue, C., (2007). Physician Integration - What does this mean?. Leadership. 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