Managing Health Care Finance Sample

The role of finance is imperative for every business as it manages and control the operations of firm in an appropriate manner. In health care firms, management of finance is an essential task this is because the health care providers like large physicians practices and hospital needs to decide on offering expanded tests or treatments by making purchase of new medical equipment’s (Cleverley, Cleverley and Song, 2010). In the procedure of financial management efforts are made by health care firms to make evaluation of sources of funds in accordance with their cost and risk.Managing Health Care Finance Sample

The present report entails to understand the analysis of financial risk for the purpose of assessing accurate risk of information in management decision with respect acquisition of funds. The study includes evaluation of financial issues that are being experienced by small voluntary organization of UK. Based upon the issues strategy is determined by local council for ensuring sustainability of business through supporters and investors.Managing Health Care Finance Sample

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Health Station Business Case

The present study is on small voluntary organization that was funded as part of urban development fund for three years by regulatory authority in UK. This is for managing the effects of long term unemployment with urban deprivation. The case study presents that there are several issues that are being faced by health stations. These are in form of financial crisis as well as lack of funds. Due to this local council has to take decision regarding whether to transfer business to local NHS bodies. The business case is comprised of various stages that are enumerated below:

Stage 1 Strategic context in relation to business case

The main aim is to create strategic context is to investigate clear reason in relation to need for finance of specific project. This provide assistance to management in making sure about various operations that can be conducted in future. The procedure of developing strategic context for business case includes assessing of affordability as well as reliability of proposal (Courtney, B. and Briggs, 2004). The current position of health station is not sound. This is because of lack of efficient sources of funds. With this firm is not able to manage its operations in appropriate way so as to offer services to individuals belonging to several nationality. In order to enhance efficiency of business it is essential for management to take into account sources of funds that can be used to grant superior health care services to culturally diversified patents that are sensitively associated with maternity and child care. Considering this, decision has been taken by local council which state that there is no need of transferring operations of firm to NHS. Thus the functioning remains in control of management. With the assistance of strategic as well as effective decisions, financial crisis can be managed by health care units (Enthoven, 2014). Managing Health Care Finance Sample

Stage 2 Determining the objectives and evaluating benefit criteria

After assessment of strategic context, management needs to determine the criteria for benefit and objectives. With this, business case can be developed in an appropriate way. The measurement of objectives as well as advantages of services can be conducted based upon the needs of patients and people (Fan and Savedoff, 2014). Thus the objectives of business case is determined in form of facilitation of superior health care services that uses modern technologies and equipments. This assist in preventing scenario such as transferring operations to local NHS by making arrangements of suitable sources of funds.

The health care unit determines the objectives on the basis of requirements of patients and other people who belongs to different culture. Large population area is covered by health care station and it makes development of vision for improving maternity care as well as child care services with the assistance of late clinic facilities (Ezeoha, 2011). It also includes granting health education  and developing sickle cell awareness Programme. For the purpose of meeting need for funds, it is important for management to determine the sources of finances that are suitable.Managing Health Care Finance Sample

Evaluation of benefit criteria

The criteria for benefit is being derived based upon the objectives of services that assist in making selection of option along with suitable source of funds. Three elements needs to be considered in the process of of assessing criteria of benefits. These factors are in form of advantages that can be measured in quantitative form, benefits that cannot be quantified financially and also the benefits that are be quantified with ease (Karanikolos and et.al., 2013). Based upon such criteria organization can effectively determine the benefits criteria.

The procedure of Developing business case is directly and indirectly depends on the selection of benefit criteria. With respect to present case the criteria for benefit can be taken in form of improvising the service quality, preventing situation regarding financial adequacy, and fulfilling customer need. Such goals of business case can be investigated by keeping track on the requirement of patients along with sustainability of organization. The major aim of making selection of appropriate sources is to enhance financial condition of business. In the procedure of determining the benefit criteria it is essential for management to take into account vision and goals of business (Gapenski, 2012). Based upon the case, organization of health care needs to take several decisions in relation to sources of funds otherwise health station might have to close its operations.

Stage 3 Assessing general options of funding sources

The primary aim of this part is to determine several options of finance that can assist the business in meeting its goal and gaining benefits such as management of business and rendering of superior health care services (Ludwick and Doucette, 2009). There is existence of suitable sources of finance that can be offered to health care in order to manage situation of financial crisis. Some common sources of funds are enumerated below:Managing Health Care Finance Sample

Bank loan: It is the most essential source of finance that can help in meeting financial needs of health care business. Under this business can take loan from financial institutions by making comparison of interest rates. Through loan business can improvise its liquidity position which can help in managing the situation of financial crisis (Kavaler, 2012). But this enhances the expenses as firm needs to make payment of high interest on amount taken as loan. Moreover the repayment of loan amount has to be made within specific time interval. In present report the financial position of health care station is weak thus business cannot enhance its expenses in form of interest and also management cannot enhance liabilities of company.

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Bank overdraft: It is the facility that is offered by bank under which the individual can withdraw more amount than balance in the account. In the present case overdraft facility can be appropriate source of finance. With the assistance of this health care station can tackle the situation related to financial crisis (Mason, 2007). In addition to this large amount of funds can be obtained by the business. Further with this health care unit can assess immense amount of data for specific time duration. This can assist in offering superior treatment and services to the patients. But for this high interest rate is charged by the bank. This can create major issue as due to lack of poor financial position business in not able to manage its expenses. Therefore firm needs to examine the benefits and drawback of sources of funding while making selection of an appropriate one.Managing Health Care Finance Sample

Trade credit: This is an essential source that assist in managing adverse situation as well as financial crisis that are being experienced by health care organization. This is short term finance  under which the firm can make payment to supplier within specific term in future. For the purpose of managing operations related to health care firm needs to make purchase of several items such as medicines and equipments (Zelman and et.al., 2009). Thus with this business can manage situation of weak financial  condition by paying late rather than on time. In order to obtain such, firm has to build healthy relationship with suppliers. This source of finance does not posses any major draw back in comparison to other sources. Thus business can fulfill the need for funds in an effective way.

Sale of unused assets: For the process of satisfying financial needs, health care organization can sell assets that are unproductive and outdated. It is most cheapest source of finance for health station as organization need not to make payment of interest in acquiring finds through this (Woolhandler, Campbell and Himmelstein, 2003). It facilitates the business in improving its financial health within shorter time span and lesser efforts. Along with this business need to develop stronger base of assets that can facilitate management in dealing with poor financial condition and in fulfilling the future need.

Donations: Health care business can obtain funds in form of donation. There is existence of different private firms that give their part of profit for charity in order to fulfill corporate responsibilities (Sedevich-Fons, 2014). This source saves expenses of business as there is no need to make payment of interest under this. It is the cheapest source of raising funds in condition of financial crisis. There is no drawback of donation. By making arrangements of private firms as donors health care unit can solve issue regarding availability of funds.Managing Health Care Finance Sample

Stage 4 Measurement of benefits

In another section of business case, several non financial benefits of business case are investigated. This assist health care firms in managing fiscal challenges. The advantages determined are evaluated with the option cost. It has major role in ranking the various options of funding. Its major benefits is that it can be quantified financially. Further it can be utilized for cost benefit analysis in different business case aspects. With the assistance of benefit criteria advantages of different funding options are determined (Nilsson and Furåker, 2012). Thus this stage will rank all the alternatives associated with sources of finance for assessing information in relation to advantages of each source that can be utilized by business.Managing Health Care Finance Sample