Quarterly and monthly financial statements should be presented to the health care board members for consideration and endorsement. The statements presented to board members should be of a financial literacy level of these members for better understanding.
The financial information is composed of income and expenditure statements which account for all monetary activities of the organization. The income and expenditure statements must be accompanied by a balance sheet which acts as evidence of the given statements. Information presented to the board members must indicate whether the organization has under spent or overspent its funds in trying to achieve the goals set in that particular year.
The statement should also show how the budget was allocated to various projects. Issues that require the consideration and approval of the board members are highlighted and presented to them. (Cleverly, Cameron, (2007). Major expenditures of the health care organization are presented to the board for endorsement and approval.
Factors that influence financial viability of a health care organization
Financial viability of health care organizations mainly depends on the organizations ability to collect patient information accurately and manage the necessary costs effectively. The professionalism and qualification of its team members especially doctors and other health care providers affect the financial viability of the organization depending on the manner in which they practice.
The insurance coverages provided to patients and the responsibility of the organization to take full responsibility of those being cared for greatly affects the financial viability of the health care organizations. Rates of health care provision and how the services are priced determines the financial stability of an organization. This affects how much they earn and how much they spend. (Kongstvedt, 2007).
How managed care organizations establish their prices
Managed care is programs managed by organizations that take full financial responsibility and risks for the care managed. Managed care involves coordinating and channeling health services to achieve desired outcomes while controlling their costs.
Managed care organizations are focused on changing the manner in which health care services are provided by changing the type of incentives used in the health care system. Managed care organizations advocate for use of health care only when necessary. (Fitzpatrick, Wallace, (2006). Therefore, health care providers in these teams make profits by giving only health services that are absolutely necessary to their patients. Managed care organizations have alliances with contractors from whom they purchase their merchandise in large numbers at reduced price and sell them to retailers at lower prices.
Techniques used by managed care organizations to establish their prices include contracting businesses with only providers who offer them discount when purchasing their goods. Managed care organizations monitor the use of basic services by the providers of health care and prevent excessive usage. (Wolper, (2004).
They also restrict the use of drugs and tests to only when it’s absolutely necessary. The organizations require their providers to share the risk of costs of health care services under their direct or indirect control. Providers of health care who manage to use fewer and less expensive services are given financial rewards by the managed care organizations and incase of excessive usage, the providers are penalized.
Some managed care organizations own services of their own and so they use the ownership to establish governing rules which are used o control the use of expensive services.
Cleverly, W., Cameron, A. E. (2007). Essentials of Health Care Finance. Jones & Bartlett publishers.
Fitzpatrick, J. J., Wallace, M. (2006). Encyclopedia of Nursing Research. Springer Publishing Company.
Kongstvedt, P. R. (2007). Essentials of Managed Healthcare. Jones & Bartlett publishers. Wolper, L. F. (2004). Health Care Administration. Jones & Bartlett publishers.