Question

What is the role of financial stability in health care organizations and what is the effect of flexible financials in increased use of preventative and wellness measures and lower length of stay?

Answer 1

In any industry, financial management involves handling routine financial operations, such as negotiating contracts, making cash available foe expenses such as payroll, and maintaining a cash cushion for unexpected costs.

Meeting different financial goals

In 2013, hospitals were buying up neighboring physician practices. doctors who sell their practices become employee of the hospital, and the hospital become a regional hospital system. That way, the hospital builds a larger and steadier payment stream: it gets money from the entire spectrum of medical care, from tests to surgery to rehabilitative services. Acquiring a practice brings in new revenues right away, so the revenue stream helps pay for the purchase, and the regional hospital system.

Managing treatment costs

Cost effectiveness is so important to an insurer's bottom line that developing guidelines rises to the level of financial management. The task requires significant medical know-how. The insurer wants treatments to work to avoid higher costs down the road. Doctors need to be sure that the treatments are medically sound. Otherwise, they put themselves at risk for malpractice lawsuits.

Preventing Expensive Medical Conditions

A health maintenance organization, which may have the same patients for many years, shares the goals of a public health agency: preventing expensive illnesses by keeping patients healthy. For example, HMOs want to find the best and most cost-effective screening tests for heart disease and cancer. For that, medical research is indispensable. Indeed, the nation's biggest managed-care organization, Kaiser Permanente, funds some of the nation's most influential medical research.

Changes Bring Fresh Challenges

Financial management is an art and a science in any industry, but health care is particularly challenging because the industry changes so fast. With the Affordable Care Act, for instance, insurers have had to recalculate their plans and their premium structures. More changes are inevitable. Providers and insurers will need exceptionally skilled financial management for a good while to come.

There is a significant and positive relation between organizational finances and quality outcomes. This indicates that organizations with more flexible finance may be more adept at meeting or exceeding patient care expectations. employers are providing wellness and health promotion programs to reduce their health care costs. Seeking to engage employees in improving their health, many employers offer financial incentives that range from cash payments to discounts on health insurance premiums. The Patient Protection and Affordable Care Act allows health plans and self-insured employers to use up to 30 percent of their health benefit premiums in 2014 to incentivize employees to participate in wellness programs.

As part of the Patient Protection and Affordable Care Act (ACA), Congress revised the law related to workplace wellness programs.The government supports these programs as a method to promote healthy behaviors, improve employees’ health knowledge and skills, and help employees get necessary health screenings, immunizations, and follow-up care.But there is a growing consensus that workplace health promotion programs could more widely prevent and control chronic disease and health care costs.

The government sought to provide employers flexibility by enacting this permissive standard rather than requiring a more rigorous approach, but this authorization could undermine the health and financial goals of health-contingent programs.

According to recent research, the presidential candidates who advocate increased use of preventive services as a cost saving device are misguided and setting false expectations that prevention can cure the ailing u.s health care system. Providing certain preventive services, mostly in clinical settings, does nt save money. but,then, again neither do most medical treatments.