Authors: Matthew Van Pelt
Addresses: 169 Northline Drive, Melrose, NY 12121, USA
Abstract: The healthcare industry is changing. The government and third-party payers are leveraging their influence to reduce spending by cutting reimbursements and basing payment on outcomes. The change is necessary as escalating costs have pushed the industry to unsustainable levels. The financial performance of organisations has been concerning chief financial officers to become more efficient. The financial management of healthcare organisations requires a future-oriented outlook to improve care by making capital improvements, while continuing to stay profitable in the present. To succeed, healthcare organisations need to fundamentally change their financial operations to survive the present and thrive in the future of healthcare reform. The first step in improving the financial management of the organisation is to become more efficient, reducing costs while continuing to provide excellent care. By reducing expenses, organisations improve its operating margin to finance capital improvements which also improves quality of care and coordination among providers. Organisations that are successful in finding creative methods to improve profitability with the same resources are found to be better prepared for changes in the industry and healthcare reform.
Keywords: healthcare financial management; hospital management; hospital operating margin; health finance; cost reduction.
International Journal of Economics and Accounting, 2014 Vol.5 No.1, pp.51 - 61
Received: 08 May 2021
Accepted: 12 May 2021
Published online: 07 May 2014 *