The central role of finance in healthcare organizations is to plan, obtain, and utilize resources in the most efficient way to maximize its value (Baker, Baker, & Dworkin, 2017). Finance involves two broad areas, which are; accounting and financial management. This paper focuses on the importance of finance to healthcare organizations.
These establishments hugely depend on financial management to guide its operations. In health care and any other business, financial management is meant to manage cash and the uncertainties that are likely to occur to ensure that the financial objective is attained. Thus, considering the high costs associated with health care in the nation, it is essential to have a department tasked with managing the finances.
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Then again, several tasks need to be undertaken for a healthcare organization to render its services successfully. These tasks include ensuring that the expenditure does not exceed the budget set, ensuring enough money to cater to all expenses like payroll, and negotiating contracts with suppliers and other business partners (2017). Budget planning is a task handled by the department of financial management and the board of directors to ensure that all the necessary personnel, supplies, and equipment are procured on time for the operations' smooth running.
The accounting part of finance is what provides the expressible means by which the financial performance of the organization can be measured and its operations assessed. Financial reporting is made possible where the organization records and report the operations’ results and financial status to the relevant stakeholders. Generally, healthcare finance is mandated with numerous vital tasks and requires qualified and experienced staff (Cleverley & Cleverley, 2017). Stable and planned financial management approaches enable healthcare organizations to render quality and reliable services to the patients.
References
Cleverley, W. O., & Cleverley, J. O. (2017). Essentials of health care finance . Jones & Bartlett Learning. https://books.google.co.ke/books?hl=en&lr=&id=ZeQlDgAAQBAJ&oi=fnd&pg=PR1&dq=Cleverley,+W.+O.,+%26+Cleverley,+J.+O.+(2017).+Essentials+of+healthcare+finance.+Jones+%26+Bartlett+Learning.&ots=4xTdbKFYLP&sig=XgYVM0cdLPJi_SVmcS4gRJjFrEw&redir_esc=y#v=onepage&q&f=false
Baker, J. J., Baker, R. W., & Dworkin, N. R. (2017). Health care finance . Jones & Bartlett Learning. https://books.google.co.ke/books?hl=en&lr=&id=tObXDQAAQBAJ&oi=fnd&pg=PP1&dq=INTRODUCTION+TO+HEALTHCARE+FINANCE&ots=m_DK1T-jSc&sig=KlZrRE5sI0x9ssOUBKQCHMfBO1w&redir_esc=y#v=onepage&q=INTRODUCTION%20TO%20HEALTHCARE%20FINANCE&f=false
