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This unit provides health leaders with an introduction to financial management in health and aged care settings as a basis for understanding the impact of leadership decision-making on financial outcomes and how financial decision-making impacts on clinical service delivery. Content includes an overview of health economics and economic evaluation, health care funding models, the principles, practices and tools for financial planning and management,basic accounting principles and financial terminology and using financial information and reporting for negotiating financial plans, tracking and evaluating financial performance and using financial information in decision-making within the clinical environment.

The Need for a Physiotherapy Center

Due to the lack of proper physiotherapy clinic in the surrounding areas, the need of a new physiotherapy center can be observed among the people live in the surrounding areas (Rivera & Delaney, 2015). The demand for such center is growing day by day and as a result, the management of Nepean Blue Mountain Local Health District. Particularly among the elderly citizens, the need of such clinic is growing day by day. The facility which is offered from the hospital premises is not specific and thus it cannot fulfil the need of the people. Thus an approach has been made in order to fulfil these demands so that the people live in surrounding areas can have a proper treatment regarding their needs without any trouble.

Up to the present time, the people need to go to the surrounding towns to get the physiotherapy facility but the trouble during their journey lessens the effect of the treatment. Thus, it is required to open a new physiotherapy center in order to solve this problem. Due to this, some expenses needs to incur due to the opening of the health care center regarding the salary of the doctors, nurse and support stuffs. Some equipment is also needed to be purchased in this regard. Thus, it is required to follow certain business plan so that the incurred expenses can be recovered within a particular period (Seargeant & Spence, 2018).

The Proposal

In order to fulfill the growing demand, the physiotherapy center is needed to open within the hospital premises. But it should also be taken into consideration that the incurred cost due to the development of the infrastructure and the operating expenses in this project are being recovered within a specific period of time. In this case, the revenues gained from the patients are considered as the main source to recover all the invested capital in this project.

Aims

The main focus of this project is to lessen the harassment of the patients who needs to go outer towns in order to get the physiotherapy treatment by providing them a proper and specific treatment center within their locality in a reasonable cost. The availability and price of the service are the two key points for which the healthcare center is expected to attract more patients in the hospital which will also help to obtain a good name and the cost incurred in this project can be recovered (Doherty et al., 2017). In order to track the exact progress of the health center, a short time break even analysis is necessary for this project by the hospital management.

As the health center is particularly aimed for the satisfaction of the patient regarding a particular service, it is also expected that the hospital will be able to obtain more revenue during its operations by collecting the fees and other charges from the patients. In order to make this happen, the healthcare center needs to provide quality service in a reasonable price in order to attract more patients. 

The Proposal

Benefits

  • Efficiency gains

As the main aim for the physiotherapy center is to provide quality service to the patients, the overall effectiveness of the hospital will certainly increased due to the course. This will increase the efficiency of the hospital and thus the resource management of the hospital management will be developed. The human resource management engaged in this project will also be developed due to the course and the support stuffs, nurses and doctors needs to put the utmost efficiency in order to offer the ultimate patient satisfaction (Finkler et al., 2016). Thus, by improving the service quality of the physiotherapy center, the efficiency of the health care center can be increased.

Thus, in order to recover all the invested capital in this project and make some substantial profit out of it, it is necessary to put utmost efforts in terms of the client satisfaction as it will help the management to increase the revenue.

  • Potential savings/increased costs

As many patients is moving to another center for better treatment regarding the physiotherapy service, opening a specific center for particularly this purpose will help to attract those patients which will increase the gross revenue of the center. But in order to do this, the hospital authority needs to incur certain costs due to the increased expenses regarding the appointment of new staffs, maintenance of the center, purchasing new equipments and other costs regarding the medical supplies (Floyd, 2016).

            Due to these costs, it is necessary to recover the capital investments within a short period of time due to the risk factor inclined in this project. Apart from the healthcare related expenses, there are certain other costs which is needed to be considered such as electricity bills, insurance premium, advisory services and other charges (Rivera & Delaney, 2015). Apart from that, the depreciation value of the equipments which will incur during the operations of the physiotherapy center in the upcoming time will also needed to consider in order to evaluate the exact cost structure of the center.

  • What are the expected benefits of this proposal?

Factor

Benefits

Patients

As the primary focus of the physiotherapy center is to provide quality services to the patients, the aim of it should be to increase the client base as big as possible. In order to do that, the services provided from the center should be adequate, satisfactory, reasonable and specific. The availability of such services should increase the effectiveness of the hospital and as the patients are the prime stakeholders of the hospital, it is needed to ensure that the benefits of the patients and their satisfaction has been prioritise primarily (Guest et al., 2015).

Facility

The facilities which are being involved in this physiotherapy clinic are totally dependent on the customer satisfaction. First of all, the quality of the service is one of the key requirements of the clinic. The behaviour of the staffs is another aspect which is needed to be considered in this aspect. Apart from it, the specialised faculty of the department is another aspect which should be another facility that is given to the customers. Apart from these, the offering of the services in the nearby area in a reasonable price is being considered as a facility for the clinic (Harris & Johnson, 2016).

Clinicians

The efficient clinicians are the major factor in this respect. Well trained clinicians will increase the efficiency of the center and this will increase the client base of the center. The experience and skills of the clinicians which will be provided to the patients and the quality of treatment should be the key factor for attracting the patients towards the health center. These efficiencies should be implemented upon the operations of the physiotherapy center in order to decrease the time span regarding the steps of the treatment which will be beneficial for the center.

Other

Other benefits that can be incurred from the proposed physiotherapy center are being considered as the reputation of the organisation. By opening the health care center, the organisation will be enabled to increase the reputation and the market share of the hospital will be increased due to the action. By opening this, the efficiency of the hospital will be increased and this will attract more patients towards the hospital. Apart from these, generating more revenue will open new scopes for the management to introduce new facilities in the operational areas of the hospital (Helmers & Kaplan, 2016).

Risks

List the risks (in the table) that are associated with this proposal either perceived or real

Risk Issue

Severity

Impact

Mitigation Plan

Notes

Financial risk

As there is a huge amount of capital is involved in this project, there are some risks that are involved in the project. The organisation needs to think about the recovery of the amount which totally depends on the fees collected from the patients (Jacquin, 2014).

The burden of the collected capital will increase the risk of recovery. In such way, the effect can be seen upon the operating cost of the project. The quality of the service can be compromised in order to repay the capital and the liabilities and other cost for the interest can be exceed from the assumed amount

The management needs to make it sure that the quality of the service will never be compromised by any means due to its production cost. As the collection of the invested capital is totally dependent on the fees collected from the patients, it is very important to attract more patients by providing the clients satisfaction in order to generate more revenue (Jordahl et al., 2017).

The risk should be maintained by the management in order to limit it to a controllable extend. The management should figure out the best policies for generating the ultimate revenue.

Patients

In order to ensure the success of the organisation, the number of patient is very important. As the benefits are totally dependent on the fees collected from the patients, inadequate number of patient will be very risky for the project (Kaplan, 2014).

The number of the patient is totally associated with the collection of revenue and the capital invested to the business

The customer satisfaction is the key point to generate more number of patients in this regard.

As the collection of revenue is directly associated with the number of patients, it is very important to generate an adequate customer base.

Insurances

The expenditure regarding the insurance cost is quite risky for the organisation.

This expenditure will cause an increased amount of operational cost in the project.

The premium should be paid in the due time in order to lessen the cost incurred from any kind of penalties.

Especially for the medical purpose, the insurance is very important as it provides additional security to the project.

Process

  • Action (insert as a flow chart as attachment 1)

The specialised physiotherapist and the trained nurse and other stuffs are required for the utmost efficiency of the organisation. An advising committee should be made in which, the departmental heads, specialised doctors and a financial advisor will be involved. The management procedure should be governed by the committee whereas the operational factors should be inspected by the department head.

Resources

Apart from the employees and equipments that are engaged with the project, there are certain other things which are required for the project. First of all, a nurse should be appointed in order to maintain the medication and for other official work such as appointment to the doctors, a representative should be appointed. An employee should be responsible for maintenance of the equipments and other necessary things such as electricity, water and waste disposal in order to provide an ultimate client satisfaction (Marino, 2017).

Reporting of outcomes

All the data regarding the financial and operational activity should be accounted by the receptionist and this is needed to be reported to the head of the department. The other staffs such as accountants, cashiers doctors should provide the reports to the representative from which, it will be collected and reported to the designated official (Reid, 2016).

Aims

Financial Information

Some of the primary requirements that are needed for the preparation of the budget from a zero base are:

  • Physician
  • Nurse
  • Receptionist
  • Cleaning staffs
  • Medical equipment
  • Marketing
  • Insurance
  • Advisory services

In the given business case, the total cost for the operations of the project is being calculated as $10,53,844. Certain values have been decreased in terms of reducing certain expenses such as production cost, rent, and interest premium. After accumulating all the costs, the overall reduced cost of the project is being calculated as $ 9,48,459.

The cost of the operations for the project is being calculated as $10,58,200. But in terms of the calculated income for the first year is being calculated as the same. Thus, it can be stated that the organisation will not be able to generate any kind of profit from the business. Thus, the operational cost and the incurred revenue of the organisation have been broken even.

References

Bunkers, B., Koch, M., Lubinsky, J., Weisz, J. A., & Whited, B. (2016). A link to performance improvement: Mayo Clinic Health System has found that even small incentives are enough to steer physicians toward value. Healthcare Financial Management, 70(3), 52-59.’

Burch, S., Gray, D., & Sharp, J. (2017). The power and potential of telehealth what health systems should know: proposed legislation in Congress offers the promise that the nation's healthcare policy will support the expansion of telehealth, allowing hospitals and health systems to fully realize the benefits of this important emerging approach to care. Healthcare Financial Management, 71(2), 46-50.

Doherty, W. J., Connell, M., Neese, K., & McDermott, G. (2017). Exploring opportunities for transforming cost structure: a performance improvement process undertaken by a northeastern health system exemplifies fundamental principles that should characterize all such efforts. Healthcare Financial Management, 71(6), 48-58.

Finkler, S. A., Smith, D. L., Calabrese, T. D., & Purtell, R. M. (2016). Financial management for public, health, and not-for-profit organizations. CQ Press.

Floyd, P. (2016). Integrating physical and behavioral health a major step toward population health management: improved care coordination for patients requiring both physical and mental health services could save the US healthcare system $26 billion annually while improving quality, outcomes, and patient lifestyle. Healthcare financial management, 70(1), 64-72.

Guest, D., Campbell, D., Larch, S., & Williams, B. (2015). Taking smart steps toward clinical integration: using the right approach to build a clinically integrated network (CIN) puts hospitals and health systems in a position to capitalize on the benefits of the CIN business model. Healthcare Financial Management, 69(3), 56-65.

Harris, J. M., & Johnson, M. (2016). Is merging a requirement for success at population health management?. Healthcare Financial Management, 70(4), 120-121.

Helmers, R. A., & Kaplan, R. S. (2016). TDABC in primary care: results of a Harvard/Mayo Clinic collaboration: a partnership between Mayo Clinic and Harvard Business School brought a costing method developed for manufacturing into a primary care setting, helping identify areas for greater efficiency. Healthcare Financial Management, 70(7), 34-42.

Jacquin, L. (2014). A strategic approach to healthcare transformation: transforming the care delivery model across the continuum is a prerequisite to success under value-based payment systems. Healthcare Financial Management, 68(4), 74-80.

Jordahl, E. A., Olarte, M., & Wagner, G. N. (2017). Variable rate debt option in a changing market. Healthcare Financial Management, 71(4), 72-75.

Kaplan, R. S. (2014). Improving value with TDABC. Healthcare financial management, 68(6), 76-84.

Marino, D. J. (2017). Building a value model for population health management. Healthcare Financial Management, 71(3), 40-48.

Reid, B. (2016). Minding the gap: getting on board with collaboration-driven revenue models: as hospitals and health systems move to a system of value-based payment, they should assess their preparedness and take steps now to ensure a smooth transition. Healthcare Financial Management, 70(5), 86-89.

Rivera, J., & Delaney, S. (2015). Using business analytics to improve outcomes: Orlando Health is taking advantage of customized solutions to get its hospital and physician practice revenue cycle systems in synch and strengthen its organization operationally and financially. Healthcare Financial Management, 69(2), 64-68.

Seargeant, D., & Spence, J. (2018). 4 strategies to unlock performance management constraints: Hospitals and health systems are confronted with unprecedented challenges in managing performance in the current business environment, yet all too many organizations have limited understanding of how best to meet these challenges. Healthcare Financial Management, 72(4), 56-62.

Shah, R. (2017). Starting small with population health management: healthcare organizations can ensure they are prepared for the inevitable proliferation of payment models focused on population health management by developing and implementing corresponding strategies in small pieces. Healthcare Financial Management, 71(3), 32-40.

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My Assignment Help. Proposal For Opening A Physiotherapy Center Within The Hospital Premises, Essay. [Internet]. My Assignment Help. 2021 [cited 30 May 2024]. Available from: https://myassignmenthelp.com/free-samples/400845-health-financial-management/proper.html.

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