FINANCE



Managing financial resources in health and social care

Managing financial resources in health and social care

Introduction

National Health Service and other well-known health care conglomeration are confronting numerous impediments and obstacles while attempting to transform their organizational figure by adopting goals oriented approach (Demeere et al, 2009, 296-304). In addition to adopt a patient focus approach, these organizations are also pushing hard to trim down their overall operational expenses by saving comprehensive amount on annual basis. (Robson, 2008, 343-362) in his in-depth study of health care operation has explained that the only way of rising above these enormous challenges is to ensure providence of quality health care services and appropriate management of organizational operations.

Meanwhile, in prevailing economic condition it has become imperative for health and social care to ensure development and implementation of contemporary financial policies and also accounting structure that could assess them in analyzing and evaluating their financial performance, and proper management of financial information (Detmer et al, 2008, pp. 45-50). In modern period, most of the well-known healthcare organizations would observe of using innovative costing tool mechanism for identification of their actual expenses and revenues.

Traditional process of financial resource management in healthcare and social centers is very hectic and time consuming, moreover, results obtained through these methods is not that reliable which could result in improper decision making. In light of the prevailing problems the national health center (NHC) in association with concerned authorities have decided to promote implementation of reference costing method for the computation of healthcare financial aspects.

Moving forward, the government of the country along with the support of NHS has formulated a standardized rules and regulation according to which it is imperative for all the healthcare center to develop such a costing system whose foundation is linked down with patient level information(Mays et al, 2006, pp. 523-531). This costing procedure would enable the healthcare management to identify the actual amount of expense incurred for individual patients and compare it with the overall expense of the organization, thus assessing them in efficient management of financial resources. In light of problems faced by healthcare center while managing their financial resources and after gaining in-depth understanding of traditional approaches of financial management, the next section of the report would explains the ways through which manager of X home center could manage its financial resources in prevailing circumstances and with minimal resources.

Discussion

LO1: Understanding systems used to manage financial resources in health and social care

1.1) Principles of costing and business control system

Health and social care center like “X home center” must ensure appropriate costing of the services that rendered on daily bases. (Appari & Johnson, 2010, 279-314) illustrates that healthcare centers observed of rendering number of different services in a particular day and thus it becomes vital for them to management and controls its costing process using following innovative strategies. Firstly, every health and social care organization ensure implementation of absorption costing technique for the measurement of cost and income of services as this technique is considered effective ...