The Six Major Objectives of Healthcare Financial Management (HFM)
The purpose of healthcare financial management is to provide both accounting and finance information to assist managers in accomplishing a healthcare organization’s goals and objectives. A variety of managers assist in this role, often led by the organization’s CEO (Chief Executive Officer) and CFO (Chief Financial Officer). It is important for healthcare managers at all levels to have a working knowledge of the six major objectives of healthcare financial management. Each of these objectives complement each other to build a successful organization – from generating income to protecting tax status. Our Case allows for the study and exploration of each of the six objectives.
Case Assignment
After completing the required readings:
Articulate the six major objectives of healthcare financial management. What does each individual objective encompass? Be as specific as you can in your descriptions.
Which of the six do you have experience with, and which do you feel you should devote extra study time to within this course? How could this learning best be accomplished?
Discuss diversity divide in leadership and how this may influence or impact the financial performance of the organization.
Assignment Expectations
Conduct additional research to gather sufficient information to support your analysis.
Provide a response of 3-5 pages, not including title page and references
As we have multiple required items to be addressed herein, please use subheadings to show where you are responding to each required item and to ensure that none are omitted.
Support your responses with peer-reviewed articles, with 2 to 3 references. Use the following sources for additional information on how to recognize peer-reviewed journals:
How to Recognize Peer-Reviewed (Refereed) Journals
BHA427 Case 1: Healthcare Financial Management
Name
Institution
Course Code and Title
Instructor
Date
Introduction
Healthcare Financial Management (HFM) entails applying financial techniques and principles to a healthcare organization to accomplish its goals and objectives. In HFM, an organization's financial resources, such as a clinic, hospital, and healthcare system, are managed to facilitate effectiveness when delivering healthcare. It is crucial to apply effective HFM since it enables the overall success of the healthcare organization, which includes providing quality care to all patients. The essay will articulate the six major objectives of HFM.
The Six Major Objectives of HFM
To Generate an Income
HFM aims to generate income. Income generation enables the organization to survive and grow (Nowicki, 2017). It allows the organization to maintain the services it offers to the community. Generating income is essential since, without a net income, the organization may not continue to operate (Nowicki, 2017). The net income is usually the monetary difference after all the organization's expenses are deducted from the total revenue collected over a specified time. Healthcare organizations make a net income by investing and using assets.
Responding to Regulations
HFM aims to respond to regulations. In healthcare, various regulations exist to protect the sick and those unable to stand up for themselves. Regulations are necessary as they facilitate standardized care delivery to all patients. In healthcare, the state, federal, and local governments pay at least 55% of health insurance expenses (Nowicki, 2017). Therefore, the healthcare organization must manage its finances well to show that the health insurance expenses are well spent. Nowicki (2017) states that organizations must be certified and accredited, to be paid by third-party payers.
To ensure a good relationship with Third-party Payers and Patients