The Health Care System Has Always Faced Many Financial Problems, Essay Example

The health care system has always faced many financial problems. These problems have been of great concern to the healthcare administrative offices nationwide which face the challenge of minimizing costs but considering the risks involved. In order to effectively handle the finance problem, the healthcare systems have worked to decrease the cost structures and also invest in fix-rate exempt bonds that offer a safe and long-term equity. The cost reduction can be done by employees being forced to take unpaid time offs in periods when the patient census is very low. This should be avoided since it can create anxiety in staff and patients as it compromises the quality of healthcare services (Evans & Galloro, 2009, p.6). The attempt of managers to cut costs on hospital equipments should be done in collaboration with the department managers and the ancillary staff to cater for the impact on patient care.

There are four main guiding principles that can be used to improve the healthcare finance as listed by Guyton and Lund (2003, p.72). They include better information management, reduced variability, comprehensive integration and accountability. Comprehensive integration in terms of automation can be used to optimize revenue collection and recovery. It can also be used in encoder applications, work listing tools, on-line claim status inquiry tools, electronic insurance verifications, electronic remittance systems, electronic billing systems and multiple checks and balances (Guyton & Lund, 2003, p.75) making every work easier in the healthcare service provision.

Mental healthcare and the aging population is another factor that is also taking so much on the healthcare finance. There is need finance the sliding scale mental health agencies. Due to fewer funds, there is need to identify areas with the greatest need to be given priority which eventually leads to many healthcare problems unresolved.

Prospective payments and capitation are also being used to improve healthcare finance. The prospective payment helps in sharing the medical risk between the healthcare giver and provider. It has improved healthcare provision from hospitalization to home care with skilled nursing facilities. Capitation is used to settle all individual healthcare costs. The Center for Medicaid (CMS) introduced payment for performance program in hospitals as an incentive to improve healthcare services. An example to this is the medical homes in Obama administration that also aim at reducing costs.

Revenue cycle is another important trend in healthcare finance. It requires that maximum revenues are collected before settling of debts to avoid loan acquisition in order to pay debts (Gapenski, 2007, p. 551). Faster payments collection is done by electronically submitting the claims which speeds the processes of healthcare provision.

There is also increased need for healthcare organization to carry out financial forecasts. This involves assessment of current financial status through available financial documents, cash budgets, forecasting future revenues and analyzing the organizations future financial status. This will form a better foundation for the health organization’s success and thus improving healthcare provision. This can be done by help of pro formas (Gapenski, 2007, p. 511).

Other trends include poor patient information and integration, poor communication between providers and payers, exploding healthcare costs and lack of accountability. Better communication between the payers and the providers is crucial to make financial settlements easier and faster to make healthcare provision quicker (Guyton & Lund, 2003, p.72-78).

References

CMS Recognizes Hospitals In Medicare Pay-for-Performance Pilot Project With Financial Awards,. Retrieved from http://www.medicalnewstoday.com/articles/111961.php

Evans, M., & Galloro, V.. (2009). The new normal. Modern Healthcare, 39(38), 6-7,16. Retrieved October 12, 2009, from ABI/INFORM Global. (Document ID: 1871726341).

Gapenski, L. (2007). Understanding healthcare financial management. Chicago: Health Administration Press.
Guyton, E., & Lund, C. (2003). Transforming the revenue cycle. Health Care Financial Management, 57(3), 72–78