Paper Example - Email Attachment Template

Directions: Fill in each blank cell in the tables below with your responses. The template will expand as you type. Be sure to include sufficient information to address how each financial factor relates to quality improvement. Include in-text citations.

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Internal Financial Factors

Revenue refers to the income generated from the sale of goods or services. (HFMA, 2018). It mostly depends on the revenue cycle and current account management (Gapenski & Reiter, 2005). In healthcare, revenue depends on the number of patients and their insurance coverage. The amount and flow of revenue can affect quality improvement since it determines the delivery of patient care and the overall health of the hospital (HFMA, 2018).

Organizational Expenses Organizational expenses refer to the costs that a healthcare facility incurs as it offers services. It includes legal and promotional fees, labor costs, tests and technology, liability costs, as well as supplies and capital expenses (Feigenbaum, 2020). Mostly, the amount of revenue determines organizational expenses. If not controlled, many expenses can affect the overall profit. The expenses should be as little as possible to ensure maximum profit within the organization.

Employee Wages Employee wages are a crucial factor when it comes to labor costs, which require special considerations. When employees have a minimum wage, there will be an improvement in quality and productivity (Goozner, 2014). However, increasing wages will put pressure on hospital profit margins, but on the other hand, motivated employees will substantially help in quality improvement (Goozner, 2014).

Departmental Expenses These are the expenses allocated to various departments for specific use within a healthcare organization. Departments are supposed to estimate the volume of their activity, but the final control is always rendered to the financial managers. When the departmental expenses are overstated, it will probably bring about a devastating effect because the overall budget may not be met.

External Financial Factors

Negotiated Contracts Through contract management, it is possible to benefit and maximize profit from negotiated contracts. When terms for engaging in the negotiated contracts are analyzed as well as assessing the payer performance, it will be possible to maximize revenue for healthcare organizations (LaPointe, 2018).

Non-Negotiated Payments This refers to the prices that are firmly fixed, and it is not possible to adjust them. It can be part of a contract or a deal for the parties involved (LaPointe, 2018). Non-negotiated payments can greatly affect the financial management of a healthcare organization, and before engaging in such deals, there must be great considerations to avoid loss of avenue (LaPointe, 2018).

Reimbursement Standards & Reporting The reimbursement standards mechanism and the reporting for healthcare are supposed to account for the quantity, complexity, as well as quality of care (Britton, 2015). Providing care to many patients necessitates greater efforts from the organization. It is thus imperative to reimburse with partiality based on the quantity. Since cases are different, a mechanism for reporting and adjusting for case complexity is needed to yield greater compensation from more complex patients (Britton, 2015). Thus, reimbursement for quality is capable of providing an incentive to improve the quality of care, which can be beneficial to the patients as well as the entire healthcare system (Britton, 2015).

Vendors are all entities offering services and products for a fee and can be either contractors or suppliers. It is very crucial to work with the right vendors to provide the best care. Sometimes financial constraints affect choosing the right vendors. Overall, partnering with the right vendors gives peace of mind to both the managers and other staff, which results in improved quality of service (Juffre, 2018).

References

Britton, J. R. (2015). Healthcare reimbursement and quality improvement: Integration using the electronic medical record: Comment on" fee-for-service payment-an evil practice that must be stamped out?". International journal of health policy and management, 4(8), 549.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4529047/Feigenbaum, E. (2020). Categories of Expenses & Revenues in the Hospital Business Setting.

https://smallbusiness.chron.com/categories-expenses-revenues-hospital-business-setting-4882.html

Gapenski, K. L., & Reiter, K. (2005). Healthcare finance: An introduction to accounting and financial management. Foundation of the American College of Healthcare Executives.

Goozner, M. (2014). Raising the minimum wage will help improve healthcare productivity.

https://www.modernhealthcare.com/article/20140111/MAGAZINE/301119981/raising-the-minimum-wage-will-help-improve-healthcare-productivityHFMA. (2018). Introduction to Revenue. Healthcare Financial Management (HFMA).

https://www.hfma.org.au/sites/default/files/uploaded-content/website-content/introduction_to_revenue_-_all_states_draft_v1.pdfJuffre, J.(2018). Partnering with the right vendors for your hospital.

http://www.healthcarebusinesstech.com/partnering-with-the-right-vendors-for-your-hospital/LaPointe, J. (2018). Maximizing Provider Revenue with Payer Contract Management.

https://revcycleintelligence.com/features/maximizing-provider-revenue-with-payer-contract-management