Currently, the cost of United States healthcare is more than 17% of the gross domestic product, and the high cost of healthcare is increasing due to factors like development of new treatments, perverse incentives and aging of the population (Reiter & Song, 2018). Rise of chronic disease is another reason for increased expenditure in healthcare. Taking an international perspective and applying strategies from other advanced countries, much can be done to reduce healthcare expenditure. An equitable and effective healthcare system that is less costly can be achieved through a single-payer system, where a specific government entity collects all healthcare fees and also pay the healthcare service expenses. Also, an all-payer approach that offers universal health insurance in addition to paying hospitals and physicians at uniform rates can eliminate billing costs.
There is a need to balance recovery audit contractors which can be done through various strategies. Firstly, maximizing and utilizing the value of the data that is available is essential. Use of audit resources present in medical facilities such as CERT Denial list and PEPPER report can help in increasing accuracy. High risk areas require effective communication for improving programs used in audit management. When problem arises, miscommunication is the cause in most cases.
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A finance committee has the role of providing a financial oversight that is in line with the board of directors’ plans. Apart from planning the annual budget, the committee has to set both long-term and short-term financial goals. For example, a committee can formulate a cash reserve fund, something like a working capital or equipment maintenance fee plan. If a strategic plan exists within a certain department, the board of directors can work with the finance committee and have a multi-year plan that will support strategy implementation (Reiter & Song, 2018). An effective finance board will demand a highly contextual report from the concerned staff, which will provide clear communication on cash and financial position of the department, resource allocation in relation to the mission, adherence to the budget and any support from donations or contributions. The report should also include highlights on expected outcomes, setbacks, and potential strategies.
Advance in technology and increase in population over the past few decades is the reason why the cost of healthcare expenditure in the United States is increasing. For example, in one of the pro forma developed by RHMC, a magnetic resonance imaging system is in the budget at a cost of $1.75 million and an additional $250,000 for constructing the MRI suite. More money is also spent on salaries, with the demand for physicians increasing due to the changes in the healthcare department. In providing the MRI services, for instance, the total amount spent on salary is $646,499. The expense on salary is expected to increase, in addition to other minor expenses required by the facility.
With the management of healthcare facility becoming a challenge, healthcare industry needs grater financial management strategy. The primary duties of any management team include keeping budgets, monitoring contingency funds and negotiating contracts and payrolls (Reiter & Song, 2018). A financial management team works with board of directors to come up with a budget to ensure that the personnel and supplies are available and that the operations are running smoothly. There is need for dual purpose in healthcare, especially when it comes to strategic planning. The yearly audits show that money is billed as it should be, and with the healthcare expenses increasing daily, funds should be available to meet what is required.
References
Reiter, K. L., & Song, P. H. (2018). Gapenski’s Fundamentals of Healthcare Finance. Health Administration Press.
