Financial Health Management - Essay Example

"Financial Health Management" is an engrossing example of a paper on the health system. Some of the immense transformations realized in the health sector have been brought about by state-sponsored programs such as Medicaid in collaboration with private insurance initiatives. Consequently, the rates of reimbursement for pediatric services have gone low and with the economic crunch witnessed, the organization will find it difficult to meet its financial obligations. The physicians find it difficult to operate within their previous financial budgets and this necessitates an increment.

It is in light of the above that we have to asses the available sources of finances for the organization, additional sources of revenue and the amount of reimbursement so as to remain financially relevant.

The agenda for the meeting include:

1. The business finances
2. Partners demand salary increment

• Revenue and reimbursements from the government and other agencies

1. New sources of revenue for the organization

According to Nowicki (2004), pediatric service has a unique pricing mechanism that is influenced by rigid factors among them government policy on health care provision, the demand for pediatric services, competent physicians and insurance firms. The government through Medicaid restricts the amount of reimbursement to be made to pediatric organizations for services offered and as such determine the rates for such services. The Medicaid patients and the SCHIP program do not provide adequate payments for pediatric services although these are the majority of our clients.

Further, most health insurance firms do not submit their reimbursement in time for there clients and there is a need to attract a greater insurance value so as to trap their client base. The low revenue through reimbursement has led to a reduction in reimbursement for the physicians which is a source of concern.

In a financial analysis, it is important that these sources of revenue be analyzed based on their significant contributions to the finances of the organization (Nowicki, 2004). The effectiveness of the revenue source will give a picture of whether it is appropriate or not. For example, most patients who are under Medicaid do not provide the highest amount of revenue though they are the majority and so seem to be less effective. However, the involvement with such patients helps to uphold the image of the organization and will enhance the goodwill of the organization. Decreasing the number of such patients while increasing the number of patients under managed care funded by their parents would be the most appropriate way to go.

The request by the pediatric endocrinologist to have additional pay should be considered although his expenses during such duties are fully covered. This will make him improve his way of handling clients while improving his efficiency. To finance such increment, it is necessary the additional sources as proposed by the other physicians on insurance and outreach be implemented so as to acquire more revenue though the additional physicians will mean additional expenditure. The salary for the additional pediatrics should be considered and weighed against the revenue from such additional clients.

In the contract with Indian Health Service, the organization will include the rate of reimbursement, reimbursement schedule, area of coverage, duration of the contract and age bracket covered (Nowicki, 2004). This will enable the organization to be able to plan with the finances for the fiscal year.

Consequently, it will be possible to develop a financial plan for an organization that can be easily implemented by the management in a continuous process. Having determined the revenue sources, the amount to be received and the expenditure items, it will be possible to apportion the revenue to the expenditure and realize the excess which is to be apportioned among the partners and for the improvement and expansion of the organization.