HEALTHCARE BUDGET

HealthCare Budget

HealthCare Budget

Introduction

Patton - Fuller Community Hospital

Patton-Fuller Community hospital started its operation in the year 1975, and since its inception the hospital is providing its dedicated medical and Health care services to the people of Kelsey and its surrounding neighborhoods. Patton-Fuller Hospital is operating hospital for making profit and it is jointly owned by the active faculty of the hospital physicians. The primary key success factor behind the hospital sustained development is the quality of the health care services and its highly dedicated and qualified staff. The hospital is a 600-bed hospital, operating as a full service hospital and is the premier health care facility in the North-West valley. The Patton-Fuller hospital is governed by a fourteen members and board of directors, the hospital is owned by 12 physician-owners, with Chief Financial officer and Chief executive officer as non-voting members.

Discussion

Patton-Fuller Community hospital derives its revenue from two major sources. Inpatient activities accounts for the total of 80% revenue (including medical, surgical and intensive care unit charges). While the rest 20% of the revenue of the hospital is derived from Emergency and other outpatient services.

Significance of Financial management

Financial management is the “identification, preparation, analysis, measurement, accumulation, correct interpretation and communication of information and knowledge used by management to plan control and evaluate within an entity and to assure appropriate use of and accountability for its valuable resources. (Ammons, 2002) Financial management includes the preparation of financial reports for non-management use as well such as financial reporting for creditors, shareholders, tax authorities and regulatory agencies. The significance of financial management in any organization is of vital importance as it defines the financial position of the company and on the basis of this information the company makes its strategic decisions. (Boyne, 2002) The wrong interpretation or representation of management accounting in financial reporting can lead the organization towards deterioration.

Financial Management practices and structure

The hospital is a central provider of health services, but at the same time it's a business as well. Therefore in order to continue its order and make a profit as well the hospital requires payment in dollars in order to retain its entity (Finkler, 2007). The break-up of resources from where hospital receives finances are as follows;

Non-patients

Contributors

Miscellaneous

Grants

Tax support

Patients

Self payment

Medicaid

Third party payer

Medicare

Third party payer

Insurance

Other sponsors and companies

The financial policy of the hospital is different for each environment and the hospital charges different amounts from different patients. For instance the amount charged to the patients who are coming through a company or by an insurance firm are charged as per the pre-determined rates between the hospital and the company. (Reimers, 2007) For a walk in patients the hospital has a different payment system and the patients are normally asked to pay in advance unlike the patients who are referred by companies are required to prove their identity and bring the receipt or any letter from the company or fax for the payment terms.

Effective financial management practices

Many factors have led to rising health care costs, which have increased faster than ...