Patton-Fuller Community Hospital Budget
Over the years financial management has been a concept that is flourishing in the world of health care. “Until the 1960s, financial management in all industries was generally viewed as descriptive in nature, with its primary role being to secure the financing needed to meet a business’s operating objectives” (Gapenski, 2008, pg.26). However, today, financial management holds a more significant role in the management of businesses overall. “Now, the primary role of financial management is to plan for, acquire, and utilize funds (capital) to maximize the efficiency and value of the enterprise” (Gapenski, 2008, pg.26). Similar too many happenings in health care, the specific goals of a business’s
Such decisions involve the choice between internal and external funds, the use of debt versus equity capital, and the use of long-term versus short-term debt” (Gapenski, 2008, pg.27). Applying this practice to the Patton-Fuller organization will help them to decide if the number of fundraisers needs to be increased, or whether more short-term or long-term investments will prove to be more useful. Despite only a slight increase in revenue, the Patton-Fuller Community Hospital must still support facility upgrades as well as maintenance and costly health information technology. The income that investments provide is typically viewed as an extra source of funding that this organization cannot go without. This type of practice will also be useful for the marketing department who projected in the 2010 budget that donations will be increased by 15%, which will also add to the hospitals expenditures in a capital budget. A financial management practice that may prove less effective for this hospital is contract management. “In today’s healthcare environment, health services organizations must negotiate, sign, and monitor contracts with managed care organizations and third-party payers” (Gapenski, 2008, pg. 28). The complexities that come with third-party repayment means that a large amount of time and resources are being spent on burdensome accounts, bills, and collection processes, instead of focusing on activities that