By: Chrishanda Anderson
HCMT241/ Rm. 1035
February 1, 2014
In this paper I will explain and discuss the healthcare delivery system and the financial aspects of it. This paper will also include resources and examples that will help to understand and explain the overall delivery and financing of healthcare. The topics that will be covered in this paper are and overview of the healthcare delivery, the methods of operational management, the importance of medical management, the conclusion and the reference page.
Overview of the healthcare delivery system
Healthcare delivery is the provision of healthcare, in which deals with the activity of supplying or providing something. Although to me healthcare delivery is basically the way in which a healthcare service is provided and how an individual interprets that service or products that has been provided. Healthcare delivery can mean several things; it really depends on the situation and the individual’s involved. It is also a combination of many elements that form the healthcare system today. Whereas it involves the way management interrelate to form an integrated healthcare delivery system (Nowicki, 2011). The elements that combine the healthcare delivery system today are financing, insurance, delivery and payments. Financing is a subset of the field of financial management that includes the analysis of the information provided by managerial accounting using techniques, such as ratio and capital analysis. Financing is a way in which healthcare is able to provided services and products to individuals and continuing to update as technology changes , so that they can better serve individuals with the latest treatments, doctors and products available. Insurance is make up of several aspects like HMOs (health maintenance organizations), PPOs (preferred provider organizations) and many subsystems. For example, managed care which is a system of healthcare delivery that seeks to achieve efficiency by integrating the basic functions of the system; employing mechanisms to control or manage utilizations of medical services and to determine the price at which the services are purchased and how the providers will be paid (Glickman, Baggett, Krubert, Peterson, & Schulman, 2007). The way that they interrelate to form an integrated healthcare delivery system is by providing a higher quality of healthcare at a reasonable and lower rate to control errors that have been made and for future errors to come. The integrated healthcare delivery system is a system of healthcare providers capable of accepting financial responsibility for and delivering a full range of clinical services to an enrolled population. Also because it’s a system formed of joint ventures, meaning it has a legal arrangement between two or more entities providing a service, product or both. Although it has been stated that the most common integration has been between the hospitals and the members of the medical staff. The different methods of managed care reimbursement and compensation, are HMOs, PPOs, or many known as the evidence-based care management used to manage companies partner with providers to determine the best and most efficient way to manage cases based on the current evidence. Another method is the consumer-driven plan in which allows consumers to select the coverage they need or want by paying the corresponding premium. Medicare and Medicaid are also methods of the manage care reimbursement and compensation, in which they do have standards in regards to the way in which compensation and reimbursements will be paid. For instance, Medicare will only pay reimbursements and compensation to hospitals, physicians and other providers; a percentage based on the services at the time provided and Medicaid states that they will not pay for services that exceed the same charges as Medicare, and only for the services that are allowed to be under the Medicaid plan.
Methods of operational management
Two operational management methods that I have chosen to analyze regarding the healthcare finance setting are finance and budgeting, and accreditation. I chose these two methods because I feel as though they have a more intellectual aspect in healthcare. Finance and budgeting is the first method that I will analyze and explain. Finance as stated above is the subset of the field of financial management that includes the analysis of the information provided by managerial accounting using techniques, such as a ratio and capital analysis. And budgeting is the process of converting or dollarizing the operating plan into monetary items (Langabeer, Dellifraine, & Helton, 2010). Finance in regards to the operational management is to make sure that there is enough funds necessary for the company or organization to achieve its purpose. Also to be used when deciding if the organization can make progress toward accomplishing its plan based on the strategic and operating plan that the organization has put in place. Having knowledge as to where the organization stands and will be in the upcoming years helps management to determine the way in which the operating system is to be used. Therefore it allows management to make measurable decision on the steps that need to be taking during the following years. Budgeting in regards to the operational management system occurs after the operational system steps have been completed. But used as an excellent way to educate financial staff on the overall well-being of the organization. Accreditation as it refers to the operational management system is the Joint Commission, in which is the primary accrediting organization for healthcare organizations. Though the Joint Commission is responsible for many things, accreditation can be earned by many types of healthcare organizations. These may include hospitals, doctor’s offices, nursing homes, office-based surgery centers, behavioral health treatment facilities and providers of home care services. The Joint Commission has been known as an independent, not-for-profit organization; but it has accredited and certified over twenty-thousand healthcare organizations and programs in the United States. Known nationwide as a symbol of quality that has reflected their commitment and meeting certain performance standards (The Joint commission, 2014). When talking about the Joint Commission, its mission has been to continuously improve healthcare for the public, in collaboration with stakeholders, evaluating healthcare organizations and inspiring them to excel in the providing of safe and effective care in the highest quality and value. And their vision has always been making sure that the people they serve always get the safest, highest quality and the best care that can be given across all settings. With this in mind I can say that the accreditation method plays a huge role in the operational management of the financial setting, because without this in place many organizations cannot have an efficient and accurate follow of healthcare.
Importance of medical management
Medical management within healthcare finance regarding utilization are as follows regarding all aspects that it deals with , which are economics, accounting, and utilization itself. Economics part of financial management is the downturn or the increases, and boards that are challenging to respond through indiscriminate cuts, by basically driving up the quality and reducing harm and improving efficiency. Accounting and the way that healthcare financial management utilizes the foundation of knowledge is divided into two major areas known as the financial accounting and managerial accounting. The financial part basically deals with just providing account information and the historical nature to external users, in which will includes the owners, lenders, suppliers, government and the insures. These are people or individuals that consolidate the financial statements for hospital to show how the organization is either growing or decreasing over time. The managerial accounting part deals with the internal part of accounting including the users and managers, people that prepare information, with supporting information regarding the functions and the changes of the organization. It also means to provide accounting and finance information that assist healthcare managers to accomplish the organization’s purposes. Many of the healthcare financial management deal with professional and personal behavior when it comes to decision making on the healthcare industry. It also utilizes foundational knowledge, such as economics by improving the quality of healthcare services that are provided. The financial management utilizes all the foundational knowledge surrounding healthcare and the way in which it uses the information that is given; as well as the changes that technology in making on a regular bases. The healthcare field cannot be understood through just the financial management because there are many other part, such as the individuals that help makeup the financial aspect of healthcare.
In conclusion I have learned that the healthcare delivery system is made up of several different part or aspects that help with the follow of the industry. The healthcare delivery system has several aspects that are broken-down into major essential aspects to give a better understanding of healthcare as a whole. With this in mind it taught me understand why healthcare is constantly changing and who technology plays a part in these changes. Healthcare research has so many levels and terms that can be involved and the different processes that is involved. Therefore healthcare can be defined as many things and has many levels that one must really be willing to learn and understand.
Glickman, S. W., Baggett, K. A., Krubert, C. G., Peterson, E. D., & Schulman, K. A. (2007, 08 17). Promoting Quality: The Healthcare Organization from a Management Perspective. Retrieved from Oxford Journals: http://www.intqhc.oxfordjournals.org Jones and Barlett Publishing LLC. (2014, 0 0). Major Characteristics of U.S. Healthcare Delivery. Retrieved from jblearning.com: http://www.jblearning.com Langabeer, J. R., Dellifraine, J. L., & Helton, J. R. (2010, 12 0). Mixing Finance and Medicine: The Evolution of Financial Practices in Healthcare. Retrieved from imanet: http://www.imanet.org Nowicki, M. (2011). Introduction to the financial Management of Healthcare Organizations. Chicago: The foundation of the American College of Healthcare Executives. The Joint commission. (2014, 0 0). Joint commission. Retrieved from jointcommission.org: http://www.jointcommission.org