Best Financial Practices
Best Financial Practices in Healthcare
Strategic Budgeting and Planning Planning and budgeting play an important role in the finance function of all health services organizations (Gapenski, 2008). Planning involves the overall process of preparing for the future, and budgeting is a part of the planning process. Strategic planning is usually conducted at the highest levels of the healthcare organization’s hierarchy. The organization’s mission and goals are decided and identified. Also, the organization’s mindset is directed towards the future with an awareness of the changing trends, market needs, technological advancements, and to cope and to operate within the changing environment (Herkimer, Jr.,
1988). Budgeting, expressed in dollar terms, involves detailed plans. There are several types of budgets that may dictate the organization’s mission and structure and managerial preferences.
They are: 1) Statistics Budget; 2) Expense Budget; 3) Operating Budget; and 4) Cash Budget. In addition to budget decisions, there is timing. Healthcare services organizations should consider two types: 1) Conventional verses Zero-Based Budgets and 2) Top-down versus Bottom-up
Budgets. Planning and budgeting are important managerial activities. It allows health services managers to plan for and set expectations for the future, assess financial performance on a timely basis, and ensure that operations are carried out in a manner consistent with expectations
(Gapenski, 2008). Without planning and budgeting, the business will be disorganized and in the long run, it will run out of business.
Pricing and Service Decisions
In healthcare organizations, the managerial accounting department decides whether an established price for a particular service is profitable. Managers in a charge-based environment must set prices on the services that their organization offers. In addition, determine
Strategic Budgeting and Planning Planning and budgeting play an important role in the finance function of all health services organizations (Gapenski, 2008). Planning involves the overall process of preparing for the future, and budgeting is a part of the planning process. Strategic planning is usually conducted at the highest levels of the healthcare organization’s hierarchy. The organization’s mission and goals are decided and identified. Also, the organization’s mindset is directed towards the future with an awareness of the changing trends, market needs, technological advancements, and to cope and to operate within the changing environment (Herkimer, Jr.,
1988). Budgeting, expressed in dollar terms, involves detailed plans. There are several types of budgets that may dictate the organization’s mission and structure and managerial preferences.
They are: 1) Statistics Budget; 2) Expense Budget; 3) Operating Budget; and 4) Cash Budget. In addition to budget decisions, there is timing. Healthcare services organizations should consider two types: 1) Conventional verses Zero-Based Budgets and 2) Top-down versus Bottom-up
Budgets. Planning and budgeting are important managerial activities. It allows health services managers to plan for and set expectations for the future, assess financial performance on a timely basis, and ensure that operations are carried out in a manner consistent with expectations
(Gapenski, 2008). Without planning and budgeting, the business will be disorganized and in the long run, it will run out of business.
Pricing and Service Decisions
In healthcare organizations, the managerial accounting department decides whether an established price for a particular service is profitable. Managers in a charge-based environment must set prices on the services that their organization offers. In addition, determine
References: Gapenski, L., & Pink, G. (2007). Understanding Healthcare Financial Management. Retrieved October 5, 2014, from http://www.ache.org/pubs/chap1-3gapenski5th.pdf Gapenski, L. C. (2008). Healthcare Finance: An Introduction to Accounting and Financial Management, Fourth Edition. Health Administration Press. Herkimer, Jr., A. (1988). Health Care Budgeting. In Understanding Health Care Budgeting (p. 4). Rockville: Aspens.