NMS11189 Leadership and Finance for Effective Service Delivery Essay Answer

Introduction

Many people are unaware of the true meanings of accounting and financial management. Financial management uses theories, concepts, and tools to help people make better financial decisions. This makes it abundantly clear that effective financial management is essential in the healthcare sector. Financial managers play a vital role in ensuring that healthcare organisations have the financial information and strategies needed to maintain excellence in long-term healthcare delivery as healthcare continues to grow and become more complicated (Leech, 2016). They are in charge of creating and implementing financial strategies that allow healthcare organisations to provide outstanding healthcare services in the long run. The financial data they provide enables healthcare organisations to make well-informed choices that have an effect on their long-term viability and financial health. This paper will examine how financial managers can guarantee that the medical care associations where they work have the monetary data and financial plans expected to guarantee greatness in long-haul healthcare delivery. The essay will also cover income, funding, and expenditure, as well as the essential financial information that is required, the objectives for which the data will be used, and the characteristics that make it more significant to managers.

Discussion

Financial managers in healthcare

At first, financial management was considered in a very simple way. The project's financial demands would be made for goods and services in an organisation. The amount of money required for the project would be estimated by management (França, and Hershey, 2018). Finally, the accounting department will investigate how to fund these requirements. Nonetheless, with the progressions in the investigation of financial administration, different elements are presently considered including anticipating, procuring and using assets to work on the productivity of the organisation. Healthcare boards are accountable, among other things, for ensuring that management and finance teams operate effectively and pursue profitable objectives. Healthcare organisations cannot succeed without robust and efficient financial management plans and systems and provide all of their patients with high-quality care (Introduction: Teasing your managerial imagination, creativity, and Resolve 2017).

Senior executives rely on finance managers to provide financial and accounting information to help them in rendering sound choices and monitor internal and external expenditures. To assist providers of healthcare in generating enough profit to pay for expenses and plan for future growth, healthcare finance managers are primarily responsible for developing and implementing strategies (Leech, 2016). Financial difficulties abound for healthcare organisations. They rely on skilled financial management because of their declining profit margins and rising costs. By assisting hospitals, doctors' offices, and clinics in developing robust financial plans that prudently manage "money and risks", financial managers have a crucial role in enabling these facilities to provide quality care to patients.

Healthcare financial managers operate in fast-paced situations. These professionals must adapt to shifting laws and regulations besides navigating shifting payment models and intricate billing coding systems. They must have a comprehensive understanding of the healthcare industry and routine financial operations in order to meet the financial management requirements of healthcare (França and Hershey, 2018). Every organisation must establish its own set of financial management objectives. These aims and objectives will be determined by the field of business in which they are involved. Organisations in the healthcare industry, for example, must develop financial management objectives that target their unique duties concerning their mission and vision.

Benefits to the Organisation in the Healthcare Sector

Careful Evaluation and Planning

The efficacy of the organisations and their overall financial health are evaluated by financial managers. With careful planning, they are capable of planning for the future. Take, for instance, the situation in which a clinic was losing patients to a facility on the other side of town due to the sluggish and out-of-date technology it was employing (Jones et al. 2018). The clinic would benefit from careful planning and evaluation when making plans to upgrade its technology. Financial managers must collaborate closely with the leadership team of the healthcare organisation to ensure that the financial plans correspond with the organisation's broader goals and objectives. When designing financial strategies, they should also consider market trends, changes in reimbursement rates, and growing regulatory requirements. Creating financial strategies should be a continuous effort. Financial managers should update the plans on a regular basis to ensure that they stay relevant and connected with the long-term goals of the organisation.

Generating Income

Investing in assets to ensure financial viability over the long term is another objective of financial management. In order to make money while remaining competitive, financial managers frequently compare healthcare service costs to market rates. Furthermore, they assess the efficacy of various departments inside hospitals. Considering whether to launch new services is another option for earning money. For instance, now that cannabis is legal in specific ways, some clinical consideration affiliations ought to genuinely think about adding a pot dispensary as one more kind of income that similarly ensures the medicine is safeguarded and being controlled truly. The medical care finance supervisor makes a proposition for a project if senior management approves it. The proposal includes costs for starting the project, possible funding options, and annual profit projections.

Protecting Tax Status

The moment a not-for-profit organisation loses its duty-excluded status is one way that bureaucrats and state legislatures are always looking for ways to get more assets. As a consequence, "compliance with tax-exempt regulations" must be the primary focus of "healthcare management teams". Healthcare organisations use a variety of strategies, one of which is to cut costs for needy patients to defend their status as nonprofit organisations. Some organisations conduct community needs evaluations and adopt strategies to meet those needs. In order to help in the creation of a skilled nursing workforce. Establishing nursing educational centres in locations where there aren't many educational options and charging reasonable tuition fees is another strategy. Many health insurers demand or strongly advise that a compliance program is implemented by all medical professionals for their own and everyone else's benefit (Jones et al. 2018). Physicians and group practices must implement compliance programmes under the "Affordable Care Act (ACA)" to offer treatments under "Medicare, Medicaid, and Children's Health Insurance". Several "commercial insurers" require healthcare suppliers to maintain a "healthcare compliance strategy" to participate in their programs. If a healthcare compliance strategy is not developed, providers run the risk of being unable to participate in any healthcare program. CMS says that if medical professionals have a good compliance program, they will be better able to avoid the risk of bad behaviour (Penner, 2016). Patients will receive high-quality care, government rules and regulations will be enforced, and criminal behaviour will be discouraged through an effective compliance program. Additionally, compliance programs assist in safeguarding against liabilities such as fraud, improper payments, system abuse, and others.

Monitoring Internal Spending

Finance managers in the healthcare sector also monitor expenses to uncover committing fraud and stealing cash. Physicians have a large effect on cost. They might give "purchase orders" for "medications or hardware" that are contrary to the requirements of a patient, presenting the association with lawful obligation (Penner, 2016). To assist in preventing fraud and the misappropriation of funds, finance managers also established "special committees" to carry out monthly audits of all equipment and drug purchases. If there is proof of fraud, the healthcare organisation can commence disciplinary actions against the doctor in violation of its policy, and comply with federal fraud and abuse statutes by conducting an investigation or taking disciplinary action.

Control Costs

The growing cost of care is one of the most critical concerns confronting healthcare organisations today. Financial managers may play an important role in assisting healthcare organisations in controlling costs and increasing efficiency. This may entail putting cost-cutting strategies in place, such as negotiating better pricing for supply and services or discovering possibilities to simplify processes (Weech-Maldonado et al. 2019). Financial managers can collaborate closely with the management team of a healthcare organisation to find areas where costs can be cut without sacrificing care quality. They can also create and put in place financial policies and processes that improve cost management and efficiency. In addition, to cost containment, financial managers may assist healthcare organisations in optimising their income sources (Bos, Boselie and Trappenburg, 2017). This may entail developing new revenue streams, such as collaborations with other healthcare providers or increasing the organisation's variety of services.

Financial Risk Management

The majority of businesses have risk assessment teams or risk management policies in place to limit or prevent losses. Due to the numerous risks associated with patient safety, risks in the healthcare sector may be higher than in other sectors, also involving "life and death decisions". To guarantee the well-being of their patient's health as well as financial viability, boards are tasked with reviewing and supervising all financial management objectives. The "board, senior executives, accounting managers, and finance managers" are just a few of the many people involved in financial management (Weech-Maldonado et al. 2019). Boards can be better equipped to make informed choices and supervise operations if they utilise a “high-quality board management software package” like “Board Effect” and follow these “10 financial management objectives” in healthcare. The healthcare industry appears to be getting more complicated every year. That provides a compelling justification for requiring independent transparency from healthcare professionals.

Track Financial Performance

To make sound decisions, it is essential to comprehend the current financial situation and the financial history of the company. By analysing financial KPIs, or key performance indicators, like net revenue, working capital, and return on equity, financial managers might get an understanding of their organisation's financial well-being and the commitments of the group to its essential objectives (Bos, Boselie and Trappenburg, 2017). By keeping an eye on their firm’s cash flow and profitability, they can make better decisions regarding staff and resource allocation to achieve their goals. If financial performance falls short of expectations, financial managers should collaborate with the leadership team of the healthcare organisation to design and implement corrective action plans (Weech-Maldonado et al. 2019). These strategies might include cost-cutting activities, revenue-boosting initiatives, or adjustments to the healthcare organisation's funding approach.

Forecast Future Financial Needs

Healthcare organisations must be able to foresee their future financial demands to secure long-term financial success. Financial managers may assist healthcare organisations in doing this by forecasting the organisation's future financial needs, taking into consideration predicted changes in service demand, reimbursement rates, and other factors (Lord et al. 2020). These projections might assist the organisation in planning for future capital expenditures and financial requirements. They can also assist the organisation in making strategic investments in new technology, services, and infrastructure.

Ensure Compliance

Financial managers must ensure that healthcare organisations follow all applicable financial reporting, billing, and reimbursement rules and regulations. Noncompliance with these standards can result in hefty financial penalties as well as legal liability (Lord et al. 2018). To guarantee compliance, financial managers should keep current on regulatory and industry standards changes. In addition, they should design and maintain robust internal controls to ensure the accuracy and integrity of financial reporting and billing operations. This may entail putting in place rules and processes that encourage openness, accountability, and ethical behaviour (Rantz et al. 2021). Furthermore, financial managers must guarantee that the billing practices of the healthcare organisation are in accordance with legislation and that claims are correctly tagged and billed. This necessitates a deep grasp of the complicated billing and reimbursement systems used in healthcare, as well as the coding and documentation standards.

Conclusion

Strategic healthcare investment management enables the outsourcing of duties like ensuring a high level of patient care, performing critical upgrades, and establishing new income streams. The financial supervisory group is additionally liable for the everyday administration of the organisation's funds, including planning, contract dealings, and guaranteeing that the organisation has sufficient cash to cover its bills. The board of directors, as well as the financial management divisions, monitor budget planning to guarantee that all essential supplies, equipment, and personnel are purchased. In synopsis, financial managers can ensure that healthcare organisations have the financial information and plans expected to ensure significance in long-stretch clinical consideration movement by making financial-related plans, noticing financial execution, ensuring exact and optimal financial uncovering, controlling costs, expecting future financial necessities, and ensuring consistency with material guidelines and rules. 

References

Bos, A., Boselie, P., & Trappenburg, M. (2017). Financial performance, employee well-being, and client well-being in for-profit and not-for-profit nursing homes. Health care management review , 42 (4), 352-368. Retrieved from: https://www.jstor.org/stable/48516386 [Retrieved on 23.4.2023]

França, L. H., & Hershey, D. A. (2018). Financial preparation for retirement in Brazil: A cross-cultural test of the interdisciplinary financial planning model. Journal of Cross-Cultural Gerontology , 33 , 43-64. Retrieved from: https://doi.org/10.1007/s10823-018-9343-y [Retrieved on 23.4.2023]

Introduction: Teasing your managerial imagination, creativity, and resolve. (2017). Financial and Strategic Management for Nonprofit Organizations, Fourth Edition, 1–6. Retrieved from: https://doi.org/10.1515/9781501505713-001 [Retrieved on 23.4.2023]

Jones, C., Finkler, S. A., Kovner, C. T., & Mose, J. (2018). Financial management for nurse managers and executives-e-book . Elsevier Health Sciences. Retrieved from: https://books.google.co.in/books?hl=en&lr=&id=s3VKDwAAQBAJ&oi=fnd&pg=PP1&dq=Financial+management+practices+of+rural+nursing+homes&ots=UbnHqL5eQw&sig=YKy_3NG_GYAgB7CP59OSwoeH9-k&redir_esc=y#v=onepage&q=Financial%20management%20practices%20of%20rural%20nursing%20homes&f=false [Retrieved on 23.4.2023]

Leech, D. (2016). Can a ‘medical mindset’ limit clinicians' leadership? British Journal of Healthcare Management, 22(11), 532–533. Retrieved from: https://doi.org/10.12968/bjhc.2016.22.11.532 [Retrieved on 23.4.2023]

Lord, J., Davlyatov, G., Thomas, K. S., Hyer, K., & Weech-Maldonado, R. (2018). The role of assisted living capacity on nursing home financial performance. INQUIRY: The Journal of Health Care Organization, Provision, and Financing , 55 , 0046958018793285. Retrieved from: https://doi.org/10.1177/0046958018793285 [Retrieved on 23.4.2023]

Lord, J., Landry, A., Savage, G. T., & Weech-Maldonado, R. (2020). Predicting nursing home financial distress using the Altman Z-Score. Inquiry: The Journal of Health Care Organization, Provision, and Financing , 57 , 0046958020934946. Retrieved from: https://doi.org/10.1177/0046958020934946 [Retrieved on 23.4.2023]

Penner, S. J. (2016). Economics and financial management for nurses and nurse leaders . Springer Publishing Company. Retrieved from: https://books.google.co.in/books?hl=en&lr=&id=0ewiDAAAQBAJ&oi=fnd&pg=PP1&dq=Financial+management+practices+of+rural+nursing+homes&ots=sJCAACfiJw&sig=b5zEjt0UNcSDdm50Rbm5qc4mYGE&redir_esc=y#v=onepage&q=Financial%20management%20practices%20of%20rural%20nursing%20homes&f=false [Retrieved on 23.4.2023]

Rantz, M., Vogelsmeier, A., Popejoy, L., Canada, K., Galambos, C., Crecelius, C., & Alexander, G. L. (2021). Financial and workflow benefits of reducing avoidable hospitalizations of nursing home residents. The Journal of nutrition, health & Ageing , 25 (8), 971-978. Retrieved from: https://doi.org/10.1007/s12603-021-1650-2 [Retrieved on 23.4.2023]

Weech-Maldonado, R., Lord, J., Pradhan, R., Davlyatov, G., Dayama, N., Gupta, S., & Herald, L. (2019). High Medicaid nursing homes: Organisational and market factors associated with financial performance. INQUIRY: The Journal of Health Care Organization, Provision, and Financing , 56 , 0046958018825061. Retrieved from: https://doi.org/10.1177/0046958018825061 [Retrieved on 23.4.2023]

Weech-Maldonado, R., Pradhan, R., Dayama, N., Lord, J., & Gupta, S. (2019). Nursing home quality and financial performance: Is there a business case for quality? Inquiry: The Journal of Health Care Organization, Provision, and Financing , 56 , 0046958018825191. Retrieved from: https://doi.org/10.1177/0046958018825191 [Retrieved on 23.4.2023]

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