Budgeting and Compliance Issues in Healthcare

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Budgeting and Compliance Budgeting and compliance issues are very important to healthcare. Budgeting ensures the quality of care given to patients, what technologies the hospital has available, and how staff gets paid, determining raises and benefits. Waste of time and supplies are damaging to the budget. Compliance issues are what determine the standards of care given to patients. They also set standards for safety of both patients and staff. Non-compliance can cause fines for the facility and loss of accreditation, which in turn causes losses of reimbursements from Medicare, Medicaid, and insurance. Safety issues can cause people to get hurt and, in turn, cause lawsuits for individuals and the organization. The cost of lawsuits and employee injuries can be very damaging to a budget. Healthcare workers also stand the chance of consequences in noncompliance issues. Fines, legal consequences, termination, and lose of professional licenses can occur. Both operational and capital budgets are made up by the CFO, Chief Financial Officer, and approved by the CEO, Chief Executive Officer, and the Board of Directors. (Operational Review of the Health Care Corporation of St Johns, 2002) The operational budget is based on projected costs, such as staff, supplies, administration, and technology costs, and projected revenue from patient services and investments. They are usually made up for the organization's fiscal year. The capital budget is a long term budget that is based on
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