Health Care Finance-Importance of Making Proper Investment Decisions
According to Zelman et al. (2014), a healthcare organization results from different decisions made by the personnel in a healthcare setting, such as administrators, caregivers, community members, donors, politicians, and boards. The findings eventually help the organization acquire and use resources to offer services, meet obligations and generate revenue. Financial management in healthcare organizations includes recording transactions and reporting results in a standardized way. Healthcare managers need to know how to make proper investment decisions to manage the finances and risks in the healthcare facility in a way that helps the facility achieve its financial goals. A healthcare facility with solid and organized financial management plans can offer efficient healthcare to every patient because the resources needed to provide healthcare services are acquired on time.
Healthcare managers must also know how to make proper investment decisions to prioritize the most critical investments. For instance, they must ensure that the healthcare organization’s financial resources are used appropriately for long-term sustainability. For example, the healthcare manager must ensure the organization has enough resources to invest in technology or expansion. In addition, they also need to decide on the services that should be eliminated based on their financial performance. For instance, if an economic evaluation indicates that the hospital is losing revenue because it does not have the technology required to treat the disease, healthcare managers may be needed to determine if the amount invested in acquiring the technology is worth the revenue generated. Accordingly, the healthcare manager may outsource the technology if the investment is too high, and the hospital may take a while to get a good return.
References
Zelman, W. N., McCue, M. J., Glick, N. D., & Thomas, M. S. (2014). Financial management of health care organizations: An introduction to fundamental tools, concepts and applications (4th ed.). John Wiley & Sons.
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Health Care Finance-Importance of Making Proper Investment Decisions
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