Kenneth Kaufman’s article Managing risk in a challenging financial environment , published in the Journal of the Healthcare Financial Management Association, delves into how hospitals can manage their financial needs with consideration of probable risks. Kaufman is among financial experts who have provided consultancy services for organizations in the health care sector. In each section of this article, Kaufman demonstrates that health care organizations should be managed from a business-oriented perspective. Although people have argued that health care is not supposed to be profit-oriented, these organizations need to ensure efficient resource utilization, and this what Kaufman looks at in the article.
In the article, Kaufman emphasizes understanding the financial position of the health care organization. Recognizably, this information is crucial when making any investment. It is common for organizations to have ambitions of either expanding their operations on acquiring particular technology. However, what many managers do not understand is the position of the institution in sustaining whatever changes are being proposed. The ability to fund any projects would be in tandem with the financial condition of the organization. At this point, Kaufman emphasizes the worthiness of a project. For example, the management should explore alternatives to determine if a particular organizational activity is worth to necessitate financial decisions such as taking loans. Observably, the appropriateness of Kaufman’s message relates to Day's (2007) on investments. Day (2007) suggests using ‘Real-win- Worth It’ that determines the relevance of an investment. Day argues that an investment should be focused on solving client needs. This information relates to Kaufman’s (2008) on the financial position of the organization. When an organization has scarce resources, but that particular initiative is crucial to the operations of the hospital, it is even worth seeking credit facilities. However, if an investment does not solve specific client problems, the scarce resources should not be used, or the management should not engage in any debt activities.
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The health care organization has been facing issues with funding. Lattie et al. (2020) note that public health organizations’ services are substandard because of inadequate resources. This assertion has been made in comparison with the quality of service which private hospitals provide. However, Lattie et al. (2020) argue that public health organizations' problem is not inadequate resources but allocation. In this case, the management does understand how to ensure that resources are used to create some of the significant impacts on customer experience. Notably, this is what is highlighted by Kaufman in the article regarding where to prioritize. Health care organizations face financial challenges because of not planning for resources. This affects their effectiveness because many resources appear to be diverted to operational costs rather than projects that would promote financial stability.
Kaufman introduces the issue of evaluation of the level of risks when handling organizational needs. Considerably, at this point, this article promotes financial courage. Risks are among the factors that prevent health care organizations from engaging in major projects. For instance, regarding the issue of inadequate staff in hospitals, Sim (2019) observes that the administrators are concerned with staffing rather than technology adoption. This is because technology is expensive, and the fear is that with such a price, the organization will record immense loss in case of failure. Notably, this s what Kaufman notes in the text by suggesting that hospitals fear investments because they do not have mechanisms to determine risks. Even Day (2007) notes that risk management is one way to assess the feasibility of a project. For instance, the risk matrix determines the uncertainties which are associated with a particular project. Recognizably, what Kaufman proposes regarding risk management is ideal because it demonstrates the need to balance between innovation and the associated risks
Issues regarding risk management are resourceful in creating a culture where hospitals can invest in large projects that make immense changes. For instance, many private organizations have invested a lot in technology, and this reduces expenses on wages. Significantly, in the article, Kaufman reveals that the organizations need to have a strategy that calculates the total risk of a project. In this case, Kaufman proposes that hospitals can embrace more significant projects with risk management approaches that will be beneficial. This is the same argument which Day (2007) uses by suggesting that many organizations focus on small projects because of fear of risks. Considerably, Kaufman's propositions about more significant projects such as the adoption of technology can help manage staffing problems. Public health organizations have made the staffing concern to be perennial. However, Kaufman (2008) has noted this, and public health facilities should not dwell on staffing as the reason for poor service delivery. The management of these facilities should explore ways to invest in more significant projects whose outcomes can handle staffing problems.
Kaufman, in the article, advises health organizations on evaluating the feasibility of a project. The report suggests the use of the best-worst case scenario approach as a guide for implementing change. Considerably, the article discourages a situation where organizations decide to stay with old traditions that seem safer. The problem with these organizations is that they concentrate on organizational changes which do not have favorable effects ( Lattie et al., 2020) . For example, an organization may decide to hire more staff since managing people is less risky. However, with technology, the risk is high. Significantly, in the article, Kaufman indicates that in the long-run, the use of technology would have been more beneficial to the organization. Notably, what the article suggests is boldness on the part of the management of these health organizations. This article does not focus on the usual tendencies of complaining about funding. However, Kaufman suggests long-term investments that might solve some of the issues permanently. All these issues regarding staffing, the article indicates they can be solved with the use of risk management policies.
The significance of using the best-worst case scenario is that it is proactive. Kaufman, in this article, demonstrates to the hospital administration how to predict the usefulness of a project. According to the article, the idea of introducing changes such as the implementation of technology should not be driven by excitement. The organization should look at both the merits and demerits of having that technology. Considerably, what the article introduces at this point is the issue of relevance. This information conforms to what Day (2007) says about the role of a project in attending to the customers' needs. Therefore, Kaufman’s article suggests that risks in a project should be calculated from the patient's perspective and not from the organization.
Kauffaman’s article focuses on the financial aspects of healthcare organizations with emphasis on financial viability of healthcare organizations. Day, on the other hand, focuses on the overall satisfaction of client needs in the process of running businesses. While Day offers that focus on client needs would make organizations more profitable in the long-run, Kauffman offers that financial that the overall comprehension of financial needs and position helps to maintain organizational competence and provision of higher levels of healthcare. Kauffman generally offers that there is a higher benefit level in the overall investment in risk management and financial stability of organizations. Day, on the other hand, is of the opinion that organizations should invest more on their client base and offering of support services that provide care to their clients for better service and satisfaction of their clients to remain viable in market bases.
The articles are relevant to healthcare in the current scenario given that healthcare requires financial stability and ability to operate efficiently. With the investment in different financial goals that serve to improve infrastructure and service levels for different clients, there is a guarantee for better service quality and a possible higher affordability of high quality of healthcare services. The article is relevant to healthcare in the current days due to the overall provision of services that relate to the financial restrictions and the settlement plans that are advanced towards the overall assertion of healthcare services and stability in the market.
Succinctly, Kaufman's suggestions in the article are vital in managing the present and the future needs of the health care sector. Notably, the health care sector is sensitive, and as such, there is a need to ensure effectiveness in self-delivery. Also, with unpredictable experiences like the emergence of a pandemic, stakeholders require the risk management policies suggested in the article. Notably, this article's relevance to the health care sector is that it discourages a situation where the focus is on incremental projects. Considerations such as the use of technology require sufficient risk management approaches. However, when organizations in the health care sector concentrate on gradual changes that address prevailing issues, they will continue to experience perennial problems such as inadequate staff. Future projections such as the adoption of technology can be realized with the help of risk management approaches like the one suggested in the article.
References
Day, G. (2007). Is it Real? Can we Win? Is it Worth Doing? Managing Risk and Reward in an Innovation Portfolio . Harvard Business Review. Retrieved 22 February 2021, from https://hbr.org/2007/12/is-it-real-can-we-win-is-it-worth-doing-managing-risk-and-reward-in-an-innovation-portfolio .
Kaufman, K. (2008). Managing risk in a challenging financial environment . PubMed. Retrieved 22 February 2021, from https://pubmed.ncbi.nlm.nih.gov/18709864/ .
Lattie, E. G., Nicholas, J., Knapp, A. A., Skerl, J. J., Kaiser, S. M., & Mohr, D. C. (2020). Opportunities for and tensions surrounding the use of technology-enabled mental health services in community mental health care. Administration and Policy in Mental Health and Mental Health Services Research , 47 (1), 138-149.
Sim, I. (2019). Mobile devices and health. New England Journal of Medicine , 381 (10), 956-968.
