Heallth Care Accounting

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University of Phoenix *

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598

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Health Science

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Jan 9, 2024

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Summative Assessment: Health Care Accounting Cristina Torres Department of Healthcare Administration/University of Phoenix MHA/598: Leveraging Results to Build Brand in the Health Sector Instructor: Tina Folk-Cromartie December 10, 2023

Introduction Financial acumen is deeply interwoven in the provision of healthcare, impacting every healthcare leader and how they lead their practice and care for patients. Issues requiring financial acumen include daily operations and implication for technical and professional revenues and expense management. Financial competence is a key differentiator for successful physician and administrative leader partnerships in today’s unpredictable and ever-changing healthcare landscape. It has been stated that the balance sheet, income statement, and cash flow summary are three important financial documents that will provide details about an organization’s financial health. (Menaker et al., 2020) I currently work for Riverside University Health Systems (RUHS) Hospital in the perioperative service department. I was able to meet with our department’s Administrative Analyst that was able to provide some insight into the department’s financial budgets, expenses, and revenues. Expenses and Revenue In the perioperative service department (operating room), the administrative team is responsible for implementing and maintaining vendor contracts. Vendors are the operating room’s surgical implants and instruments suppliers. Each vendor will have a contract and their budget is forecasted yearly to determine the department’s overall usage throughout the fiscal year. I was not able to obtain a hard copy but was provided what our financial statement headers look like. As you can see the first column will display the vendor’s name followed by their yearly budget right next to it. Based on what I was able to see by the end of the year each vendor still had budget funds available to spend. The major trend that stood out was that not one vendor exceeded their budget for the year. The incoming volume of surgeries were heavy in June, July, and October and that displayed higher usage in the budget. The

overall budget for the whole year was around $20 million dollars and it was reported that the department still had a little over $5 million dollars left at fiscal’s year end. Contain or Reduce The operating room depends on surgical procedures for its revenue. The more cases the more money that comes in from insurance reimbursement. There are a few ways to contain or reduce costs; one would be to make sure the department is looking at contracting opportunities by leveraging your negotiation skills, it will allow for competitive prices that will help reduce costs. The second way would be focusing on inventory management, as most hospitals struggle to manage both proprietary and consignment inventory items. If failed to manage inventory properly, valuable time is lost, critical implants or equipment are not ready, and it can result in delaying procedures substantially. The third way would be to reduce and eliminate waste. The operating room generates up to two-thirds of regulated medical waste meaning supplies and implants were opened and not used during a procedure which makes them ineligible for reimbursement. The last way would be to standardize opportunities. A standardization of supplies, devices, and implants used by physicians is imperative. It will reduce hospital expenditure and improve healthcare quality. (Miller, 2022) Reimbursement Strategies Every organization can find ways to improve reimbursement strategies. In my department, we can focus on getting the price right. Pricing is an essential component of the department’s cost-saving strategy. To implement this, our analyst could review all agreements annually and in-term reviews for pricing opportunities and analyze reimbursement when possible. Another strategy would be to get the utilization right. Management and staff need to ask themselves are we following operating standards and doing things ethically? We might want to get insights into variations, seek insight into standardization, and dig insights into product conversions. Lastly, we would want to possibly adopt cost innovation and look at our discipline of cost management. (Miller, 2022)

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