is financial management important to the organization?
Financial management is important
to the organization because it provides information about accounting and
finance that help the healthcare organization in achieving its goals. Financial
management overlooks various administrative duties such as, planning,
organizing, and controlling, etc. that help the management team of the organization
make decisions and work towards accomplishing the organization’s purposes. The
major objectives of the financial management of a healthcare organization are
to generate income, to respond to regulations, to facilitate relationships with
third-party payers, to influence the method and amount of payment, to monitor
physicians, and to project tax status (Nowicki). All of these
objectives and responsibilities of financial management not only assist the
organization in achieving its purposes, but also influence the organization’s
between the purpose of healthcare management and the purpose of health care
The purpose of healthcare
management is to achieve the organizational purposes (Nowicki). The owner of an
organization establishes the organizational purpose and in a healthcare
organization the not-for-profit organization’s purpose is to offer healthcare
services to the community, the for-profit organization’s purpose is to make a
profit. The healthcare management team works towards achieving the
organizational purposes by effectively communicating them with the employees,
owners, and customers etc. Healthcare financial management on the other hand is
responsible for providing information to the healthcare managers that
accomplish the organization’s purposes. Financial management report and advise
the healthcare management team.
the major objectives of healthcare financial management.
The major objectives of healthcare
financial management are to generate reasonable net income, net income is the
difference between the organizations revenues and expenses (Nowicki). In order for the
organization to be running smoothly, the organization must have a positive net
income. The second objective is to respond to regulation. The government regulates
health care, to protect the sick, elderly, etc. and the healthcare financial
management is responsible for responding to the rules in an effective manner (Nowicki). The third is to
ease relationships with third party payers. Forth is to influence methods and
amount of payment with third-party payers. The fifth objective is to monitor
physicians (Nowicki). Physicians highly
influence the amount of spending in a healthcare organization, hence financial
management makes sure that they are in check and are not a liability to the
healthcare organization. The sixth and the last objective is to project tax
status. The healthcare financial management protects the organization’s tax
status by reducing tax liability and their tax-exempt status (Nowicki).
the major ethical theories and how they apply to the role of a healthcare
Healthcare managers represent a
utilitarian view of ethics (Nowicki). For example, the
phrase “the greatest good for the greatest number”. This view lets managers
forgo the use of resources for one patient, to preserve the resources for other
patients in case of limited availability of resources. On the other hand,
clinicians have a more deontological view of ethics. Their decision making is
based on their duties to the patients, and not the ends-based decision making
of the managers (Nowicki).
why financial managers should be concerned with quality initiatives.
Financial managers should be
concerned with quality initiatives because failure to deliver the best quality
of care can be harmful to the patient and also result in lawsuits and colossal financial
loss to the organization. Quality initiatives provides a way to keep everything
in check, such as how the resources are being used and help financial managers make
the necessary changes to improve resource distribution.
how financial management and the management functions will be important as
healthcare changes in the future.
The financial management provides
accounting and finance information to the managers who then make decisions
accordingly (Nowicki). As healthcare
changes in the future, the financial management and the management functions,
such as, planning, organizing, staffing, directing and controlling will be
important for the healthcare organization to make decisions and accomplish its