Custom «Health Care Financial Management» Essay Paper Sample
Public expenditure has greatly increased due to over reliance on credit in the past few decades. This trend has also greatly been seen in Healthcare facilities. Over the years, they have attracted funding without interest since they are largely seen as no-profit organizations. Such organizations exist only for the benefit of the entire public. This has led the healthcare organizations to have very big credit holes and overly made most of them have poor balance sheets. Bryoles et al (2009), make some interesting directions of going around this problem to get to the point of profitability for such health care providers.
It was observed that in the last decade, there has been a widening gap between those providers that were by large profitable and those that were not. It seems as though the non performing health care providers as far as financial records is concerned were getting deeper in the hole. This could mainly be attributed to the bloated costs they incur. Fluctuations in the market were also seen to affect this institutions and this is not good for the health care providers. Ideally, they should have shock absorbers to be able to cope with any market trends since they provide a very ital service. Fluctuations in the market should be avoided at all costs (Broyles et al, 2009)
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There is formula of financial management to avoid losses and to recover from them. The rationale of their approach is cutting of costs. They observed that the margin that should be the prophet of their direction is the difference of the costs they incur in operation with the income they generate. They make a bold statement that if this difference is negative, then management should think of stopping making more loss through operational costs and make a minimal loss. They suggest that practices that are catapulted towards increasing profit will overly increase the liquidity which is good for shock absorption. It will also help to increase credit worthiness of the organizations. Apart from attracting capital, this also goes a long way into helping have strong margins. (Broyles et al, 2009)
While this may seem like a good solution, it comes imbibed with critical issues. Perhaps the most important is the fact that their model recommends cost minimization. This is a good management decision but unfortunately, it also corresponds to less quality service. This is not desirable for the clientts of the health care providers. They also make a blatant mistake of not factoring in taxation in their computation of loss and or profit. This may lead to wrong figures being arrived at since the IRS has been changing its tax decisions for the healthcare providers since 1999. It has been reviewing its tax policy as it argues that the health sector should also be taxed on its bonds like other players in the business field.
Analysis of The data
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If all things in the financial environment remain constant, then their computations can be said to be representative. But just how things can be made not to fluctuate in the excited financial environment remains to be seen. Market trend have been known to affect every business activity and the health sector is by no means an exception.
There is no blanket solution to the different financial problems of the different health care providers. Each one is faced with unique challenges due to different organization structures and environmental factors. Bryoles et al (2009) provide a good reference point but different organization should asses their unique problems in the correct context without juxtaposing themselves so that they can find relevant tailor-made solutions
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