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The unique financial management of healthcare organisations

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  • Matthew Van Pelt

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.

Suggested Citation

  • Matthew Van Pelt, 2014. "The unique financial management of healthcare organisations," International Journal of Economics and Accounting, Inderscience Enterprises Ltd, vol. 5(1), pages 51-61.
    • Handle: RePEc:ids:ijecac:v:5:y:2014:i:1:p:51-61
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