HND Health and Social Care Management
Managing Financial Resources in Health and Social Care - Case Study
John and Jill are old students of WLCBMS who have completed their HND in Health and Social Care Management. They are setting up a new dynamic care home in Hounslow. John and Jill contact you to join their team as they remember you had a particular interest in finance.
You have a preparatory meeting with some potential investors, one being Hounslow Council. John and Jill ask you to prepare the following points in your report to present to the meeting.
TASK 1:
LO1 Understand how systems are used to manage financial resources in health and social care
1.1 Explain to the committee the expenditure, budget, capital and potential income for your new dynamic care home. For this part of the report you will need to explain what principles of costing will be used and what would be the most appropriate business control systems to monitor financial information within the home.
Answer should have: Costing and business control systems: costs, income, cost-benefit analysis, expenditure, budget, capital, cost control, cost centre; outsourcing, competitive tendering, forecasting, profit, break even; basic software for monitoring financial information within an organisation
1.2 Identify to the committee which information will be needed in order to manage the financial resources. In this part of the report you should consider your business costs.
Answer should have: Information: business costs eg people, equipment, finance, buildings, consumable items, administration; income streams; trends and external influences eg changes in policy, competitive factors, legal requirements
1.3 Explain to the committee what regulatory requirements need to be considered in terms of legislation, codes of practice and policies when managing the financial resources of the care home.
Answer should have: Regulatory requirements: legislation and codes of practice, audit, accountability, policies
1.4 In summation of your report, tell the committee your opinion of what would be the best system for evaluating financial resources of your care home.
Answer should have: Systems: sources of income, how budgets are set, administration of budgets, cost centres, accountabilities, audit requirements
After your meeting with potential investors and the council, you decide to have a meeting with John and Jill to discuss with them some other sources of income. You prepare a PowerPoint presentation to explain your points clearly.
TASK 2
LO2 Understand the role of planning in the management of health and social care budgets
2.1 In your meeting with John and Jill discuss the diverse sources of income that may be encountered in health and social care such as public, private, voluntary or national funding. You will need to undertake some research to present your ideas.
Answer should have: Diverse sources of income: public, private, voluntary; local, national
2.2 Looking at the answer for 2.1 analyse the factors that may influence the availability of financial resources in health and social care organisations. You may want to include outsourcing, types of specialised services and inter- agency partnerships.
Answer should have: Influences on resource availability: funding priorities, agency objectives and policies, private finance, outsourcing, inter-agency partnerships, government policies, geography, type of service
2.3 Different types of budget expenditure have different effects within a care home. Review at least 2 different types within your presentation.
Answer should have: Types of budget: cost centre, project management, outsourcing contract
2.4 In your presentation suggest to John and Jill what factors should be taken into consideration when making decisions about the care homes expenditure. You should consider short, medium and long term planning, cost benefit analysis and environmental analysis.
Answer should have: Decisions about expenditure: environmental analysis, accountabilities, priorities, short-, medium- and long-term planning; cost-benefit analysis; financial risk, project management
After your presentation, John and Jill need some clarity on how to monitor the finance of the care home. John and Jill want to maintain as much transparency and accountability as much as possible. To safeguard themselves, John and Jill ask you to include information on what to do when potential fraud is suspected. John and Jill ask you to email them with the information.
TASK 3
LO3 Understand the importance of monitoring budget expenditure in health and social care organisations
3.1 Explain to John and how the care homes expenditure can be monitored and how shortfalls can be managed. You may want to include in your email information required for monitoring expenditure such as spreadsheet data, cash flow and controlling costs.
Answer should have: Information for monitoring expenditure: cash flow, controlling costs, spreadsheet data, training needs Financial shortfalls: priorities, virement, reserve funds, alternative external income sources; implications for individuals within the service
3.2 As requested by John and Jill, explain to them what actions need to be taken when fraud is suspected when analysing the financial information for reliability, validity and sufficiency. John would like to know how to report evidence of fraud.
Answer should have: Suspected fraud: analysing financial information for reliability, validity and sufficiency; reporting, evidence of fraud
3.3 In an evaluative summary tell John and Jill which budget monitoring arrangements would be the best for their care home.
Answer should have evaluation of Information for monitoring expenditure: cash flow, controlling costs, spreadsheet data, training needs
John and Jill have given you full responsibility of the financial management of the care home. They ask you to keep them informed of any high impact decisions and unexpected costs. You are to report back to John and Jill quarterly.
TASK 4
LO4 Understand how systems and processes for managing financial resources influence health and social care services
4.1 Identify what information is required to make the financial decisions for the care home. You may want to include in your answer, sources of income, information available and who is responsible for making the decision making.
Answer should have: Financial decisions: responsibility for decision making, information available, sources of income, priorities etc
4.2 Analyse the relationship between the care home service that is delivered and the costs and expenditure. You may want to include in your answer cost benefit analysis, pricing policies and purchasing arrangements
answer should have: Relationship between service delivery, costs and expenditure: cost-benefit, pricing policies, purchasing arrangements
4.3 When looking at financial considerations we must also consider the impact on the individual, such as quality and access to service. Evaluate the impact of such considerations.
Answer should have: Impact on individuals: quality of service, access to service
4.4 Hounslow council were very impressed by your report. They wanted some input into how to make the care service more efficient within Hounslow. They have asked you for your suggestions on ways to improve the care home service through changes in financial systems and processes.
Answer should have|: Recommendations: options available, supporting evidence, information to be presented for discussion by financial decision makers
Indicative reading for learners
Textbooks
Broadbent, M. and Cullen, J. Managing Financial Resources(Third Edition,
Butterworth-Heinemann, 2003) A generic textbook, but written for non-specialists and easily transferable to health and social care
Field, R. and Brown, K. (Ed.) Managing with Plans and Budgets in Health and Social Care(Learning Matters, 2007)
A practically based book for managers in health and social care, covering topics such as budgeting, forecasting and finance control Journals
Financial Management; Chartered Institute of Management Accountants
www.fm-magazine.com A downloadable generic magazine with a wide range of topics, some of which will be relevant to the unit