Financial Resource Management in Healthcare (Essay Sample)
You are the chief financial officer (CFO) of a nonprofit organization, Seamus Company, and have been asked to analyze the company’s health insurance plans for any cost-saving measures. You have also been thinking of innovative ways to help reduce cost, such as leveraging resources through healthcare partnerships. Healthcare coverage is the sole principal employee-related expenditure for most employers (aside from salaries). Employers are shifting the healthcare cost to their employees by encouraging them to think more about health-related expenses and behavior. Employers increasingly offer incentives to remove spouses from employee plans. Employers may charge workers extra if a covered spouse has access to other insurance, or they may pay bonuses when spouses are not on the company policy.
Your submission must be your original work. No more than a combined total of 30% of the submission and no more than a 10% match to any one individual source can be directly quoted or closely paraphrased from sources, even if cited correctly. An originality report is provided when you submit your task that can be used as a guide.
You must use the rubric to direct the creation of your submission because it provides detailed criteria that will be used to evaluate your work. Each requirement below may be evaluated by more than one rubric aspect. The rubric aspect titles may contain hyperlinks to relevant portions of the course.
A. Create a report (suggested length 5–8 pages) that includes the following:
1. Propose three fiscally sustainable strategies for Seamus Company from the perspective of a CFO, moving away from a fee-for-service model to a MCO model.
a. Recommend a plan to carry out each of the three sustainable strategies from part A1 by including the following:
• cost-saving measures
• tax deductible considerations
• other tax advantages
• fiscal management improvements
b. Discuss two financial management principles of Seamus Company that would support your recommended plan from part A1a.
c. Discuss how the strategies from part A1 align to Seamus Company’s goals of reducing the costs of the company’s health insurance plans.
2. Choose one of the strategies from part A1 to analyze the use of increased service benefits for Seamus Company by doing the following:
a. Discuss the healthcare utilization risk strategy that Seamus Company may face.
b. Describe three financial benefits to Seamus Company with the implementation of increased service benefits.
c. Describe three potential financial drawbacks to Seamus Company with the implementation of increased service benefits.
d. Explain how an employee’s increased usage of these service benefits can be beneficial to Seamus Company.
3. Analyze external healthcare partnerships and their financial benefits by doing the following:
a. Discuss two financial benefits from external healthcare partnerships.
b. Discuss two financial drawbacks from external healthcare partnerships.
c. Determine whether an external healthcare partnership would be beneficial for Seamus Company.
i. Justify your determination of whether an external healthcare partnership would be beneficial for Seamus Company.
B. When you use sources, include all in-text citations and references in APA format.
Financial Resource Management
Financial resource Management overview
Globally, the demand for maintaining healthy, safe, and sustainable communities is increasingly growing. Today, the healthcare system is continually changing, especially with the rising health costs and remuneration demands. Therefore, the management of financial resources in health facilities plays a vital role in achieving efficiency and effectiveness. With effective and organized financial management strategies, healthcare facilities can provide efficient health care to all their patients. Financial management in health care organizations entails managing money and risks in a way that helps achieve the financial goals of the organization (Finkler et al., 2018). Typically, unless the healthcare costs are maintained at a reasonable rate, patients and insurance providers would be required to pay higher prices hence compromising the affordability and accessibility to health care services. The financial management personnel in healthcare settings are tasked in the evaluation and planning, crafting of long-term investment decisions, working capital management as well as budgeting and accounting.
Currently, national governments spending on healthcare is continually increasing. For instance, in 2018, the United States health care spending accounted over 18% of the gross domestic product. Although the health care organizations have been strategically controlling the costs, the costs are expected to continue growing in the anticipatable future. Similarly, many patients worldwide do not access recommended care, and nearly 50% of Americans will be suffering from chronic diseases such as cancer and diabetes by 2030 (Shanks, 2016). Controversial debates have been raised with many experts pointing out to the outdated fee-for-service model contributes to the rising healthcare costs. Usually, under this model, payer compensates for all services, regardless of the impact on the patients’ health. Additionally, in the fee-fee-service, no initiative discourage the delivery of unnecessary services. Although most patients are relieved of the direct cost by insurance services, doctors can order as many medically unnecessary tests.
To abolish, the fee-for-service involves realigning the care delivery and payment incentives in the health care system. Health cost should be based on the quality and utility of services provided rather than volumes of services. Currently, the policy of paying for performance is standard tread in health care systems. Moreover, health care experts argue these models are detrimental to the health of patients. For instance, unnecessary medical imaging scans expose patients to excessive radiation. In the current health care system, new models have been formulated to complement the unfavorable fee-for-service paradigms. These new models are focused on enhancing sustainability and transformation across all sections in the health care system. With the new models, the high levels of accountability, self-evaluation, coordination, and data-driven can be achieved (Bosko & Hawkins, 2016). Example of such models includes; Accountable care organizations and patient-Centered Medical homes.
Primarily, Fee-for-service model, health providers are compensated depending on the number of visit per person. Mostly, patients may have to wait until they feel unwell to seek health services, therefore compromising disease prevention initiatives. As a response to the challenges of fee-for-service, the primary care reimbursement models are shifting to value-based towards managed care organization (value-based reimbursement systems). Managed care organization is health care providers who offer managed care health plans. Frequently, the health organization contracts w...
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