2 Jun 2022


Solutions to the Financial Problem in Healthcare

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The complex dynamic of the healthcare environment is confronted by a district set of challenges. The financial crisis in the healthcare fraternity has become more severe than ever before. The credit crisis has affected the heath care due to high levels of uninsured people seeking healthcare services, staff shortage and low reimbursement rates from Medicare and Medicaid. Hospital normally grows through four phases of financial disintegration if not effective measures are taken into consideration; weak performance, default, bankruptcy, and financial dissolution. Various scholars have identified an extensive literature about the effects of financial problems on health and ways of saving money. Most of the patients are locked out of treatment because of healthcare cost and unemployment. Consequently, many people have lost their lives especially cancer patients and other patients have been locked out from healthcare services. 

Labor and supplies have been identified to be the largest expenses in the healthcare. Therefore the best way of saving money in the healthcare is by controlling and monitoring the expenses of labor and supplies ( Böhme et.al, 2014) . Alexian Brothers Medical Center is a hospital that operates with a margin of 3.8% and hence a good example for other healthcare organization to start saving on costs. The hospital examines the productivity of every department on a daily basis. The healthcare should initially consider the patients’ needs and ensure they receive the highest quality of care ( Böhme et.al, 2014) . Then, the productivity of every department is contrasted to the benchmarks or expectation set in each department. 

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Supplies are also important expenses in the healthcare, and hence effective utilizations of resources is significant to save costs ( Langabeer & Helton, 2015) . The healthcare should put up a team that concentrates on examining resource consumption and find ways of saving money but still retaining high-quality care. Additionally, the healthcare should monitor resource consumption to ensure that the hospitals do not overpay for supplies by standardizing with a certain vendor ( Langabeer & Helton, 2015) . Measures of productivity should be specific in each department so as to monitor how they should be staffed and also enables the hospitals to makes cost-effective decisions. 

Healthcare can implement these solutions through automating manual procedures. Hospitals should automate requisitions invoice, purchase orders, providers and suppliers so as to reduce error prone procedures in the supply chain which have contributed to higher costs. Health cares should deliberate on e-commerce solutions while implementing the automating manual processes ( Langabeer & Helton, 2015) . Expense management software is an e-commerce solution that saves both money and time when executed properly. They will create a critical link across healthcare organization and functions as they provide visibility to data and also promote better management of data information that is entered incorrectly on a daily basis. 

The nurses have a pivotal role to play in the implementation of automating manual procedures. Nursing is a large professional group, and it is often expensive. Based on the patients’ acuity and unit census, a targeted number of hours per patient day (HPPD) is allocated. When nursing house surpassed the HPPD designated to patients, the nurse managers are required to document a report explaining justifications ( Langabeer & Helton, 2015) . Therefore the nurse can make a huge impact on their unit budgets by ensuring that overstaffing does not occur in the unit they are in charge. Moreover, they should also avoid excessive utilization of unscheduled leave which requires overtime and examining the use of supplies. 

In conclusion, the healthcare should consider reducing the labor and supplies cost which have been identified as the major expense in the hospital. The labor and supplies should be consistently monitored through the implementation of the automating manual process which will eradicate errors that are performed on a daily basis. 


Böhme, T., Williams, S., Childerhouse, P., Deakins, E., & Towill, D. (2014). Squaring the circle of healthcare supplies.    Journal of health organization and management ,    28 (2), 247-265. 

Langabeer II, J. R., & Helton, J. (2015).    Health care operations management . Jones & Bartlett Publishers. 

Obama, B. (2016). United States health care reform: progress to date and next steps.    Jama ,    316 (5), 525-532. 

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StudyBounty. (2023, September 15). Solutions to the Financial Problem in Healthcare.


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