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Financial management implies handling some day-to-day financial operations, for example, payroll monitoring or keeping unexpected expenses under control. Therefore, the modern business environment in any professional sphere calls for a cohesive financial management strategy. Furthermore, with the introduction of the Affordable Care Act, electronic health records, and the Medicare billing system, the financial aspect of healthcare requires extra attention as well as exceptional leadership and decision-making skills.
Compared to the past decade, healthcare finance has gained increased attention due to the need for keeping the system in order and making sure that patients receive appropriate levels of care. Also, society is trying to reduce spending, which means that people often chose to visit the doctor less often. Subsequently, fewer patients in healthcare facilities cause medical staff to risk their jobs. Therefore, the role of finance in the healthcare industry has increased dramatically.
Financial management in healthcare can be exhibited on a number of corporate levels. When it comes to the corporate executive level, financial management refers to leading the staff towards a set goal at the same time with making strategic financial plans (Brumley, n.d., para. 3). For example, major healthcare providers such as large hospitals can make a decision to provide a wider range of treatments and tests through acquiring innovative medical equipment. Financial management in such cases will usually imply looking for the most efficient way to pay for the equipment at the same time with helping to make the best decision on how to cut costs without putting employees payment in danger. Thus, financial management in healthcare is challenging and requires a range of decision-making skills because the industry changes very fast.
A healthcare finance department should be structured for effectiveness since even minor costs spent on extra purposes can influence the healthcare organization to a significant extent. In large healthcare organizations such as hospitals, the finance department deals with controlling and monitoring the expenses as well as setting annual budgets for the facility. In the majority of hospitals, the finance department is made up of two sections management accounting and financial accounting. While management accounting deals with preparing the annual budget and monitoring it, financial management implies dealing with payroll, accounts payable, and accounts receivable (St. James Hospital, n.d., para. 2).
Key positions in the healthcare finance department include the Director of Finance, Financial Accountant, and Management Accountant. The Director of Finance is responsible for developing and maintaining financial statements, ensuring the compliance of accounting procedures with the internal financial affairs, and sustaining the overall effectiveness of the financial department. The Financial Accountant is responsible for analyzing and reporting the financial transactions in the facility while the Management Accountant deals with accounting for the financial transactions to support decision-making.
It is strategically important to have the correct department structure to guide all medical staff towards a set goal by providing a framework of official financial reporting relationships. A cohesive department structure enables the organization to include new positions for medical professionals and offer employees a steady and flexible background for growth and development. Without a stable financial department structure, employees will have limited information about their financial responsibilities and rights. Therefore, a cohesive department strategy facilitates effectiveness and provides clarity of operations to all employees in the department.
References
Brumley, S. (n.d.). Role of financial management in health care. Web.
St. James Hospital. (n.d.). Finnce.
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