One of the biggest problems that healthcare organizations face is adequate allocation of their financial resources. Because of the nature of healthcare, it cannot be run like a typical business, with a focus on maximizing profit above all else. Due to this, traditional methods of fiscal management often do not apply. Despite this, a healthcare organization must still focus on the primary goals of sound fiscal management: namely, controllership, fiscal management, and auditing.
Meeting the “deliverables” (the goals of the organization) often puts strain on the resources of the healthcare organization, so smart management is necessary in order to balance existing funds, bring in new funds, and otherwise keep the organization in the black. By studying how deliverables impact a healthcare organization’s bottom line, we can better understand how to manage a healthcare organization’s resources in the event of disaster.
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One of the most important aspects of running a healthcare organization is maintaining an evidence-based culture. Because healthcare organizations focus on helping people maintain their health and stay alive, decisions need to be made based on facts and logic, not speculation, hearsay, or theories. However, financial mismanagement can put a strain on this culture because a lack of resources can result in further bad decisions made out of desperation. It’s much easier for an organization to make decisions about its future when it has adequate resources to carry out its day-to-day operations, so poor financial management can directly erode the evidence-based culture that the company has worked so hard to maintain.
Maintaining adequate financial resources is also an important aspect of running a healthcare organization. Good financial management results in a proper allocation of resources, allowing the organization to stay in the black and keep going on a year-to-year basis. Additionally, a smart allocation of resources allows the organization to plan for the future, creating new departments and funding new ideas as they become available or are conceived. However, poor maintenance of financial resources can lead to the organization stagnating as it lacks the money to carry out improvements to its services or features. In the worst case scenario, an organization can run out of money to fund its daily operations, placing the care of its patients and the performances and salaries of its employees at significant risk. To belay this, a management team must carefully consider what resources the organization has access to and the best way to take advantage of them. Smart use of these resources will keep the organization running smoothly in the future.
Finally, financial mismanagement can also lead the organization to lose its culture of integrity. It is important for organizations to ensure loyalty, honesty, and industriousness in all of its employees, in order to ensure that they do the best possible job and behave in an ethical manner. However, poor financial management can put a strain on this culture, because a lack of financial resources is associated with increased dishonesty, laziness, and whatnot on the part of employees. In order to keep this from happening, good financial management should be encouraged and enforced at all times, in order to keep employees on their best behavior and performing their best.
As can be seen, poor financial management has ramifications for a healthcare organization well beyond the fiscal. Bad financial management can cascade throughout an entire organization, negatively impacting everything from evidence-based observation to the personal integrity of employees. These disasters can be averted if management is smart about allocating financial resources as well as balancing the books. In this fashion, the health of a healthcare organization can be preserved for a long time to come.
