Assignment: Operating Reports
The Chief Financial Officer (CFO) of your healthcare organization comes to you for feedback on the way the organization handles its operating reports. The organization's various departments are currently using a variety of report formats, including daily, weekly, quarterly (with statistics), and annual year-end reports. The CFO wants to know the type of data as well the reporting format you find most helpful in order to improve the organization's operating reports.
In a 2 page Word document, explain what financial information on a daily, weekly, and quarterly basis is most important to the CFO and management team, and what format you recommend the data be presented (format examples include tables, graphs and narrative). When completing assignment, provide answers as though you are replying directly to the CFO. Be sure to provide examples to back up your feedback on the organization's operating reports (for example, what data should be included in a daily report and what format should be used).
Finance in Healthcare and Other Business Sectors
HIM's Role in Finance Management
There are many similarities between finance in healthcare and in other business sectors, but there are some aspects of healthcare finance that may not be included in general financial training. For example, finance professionals working in the healthcare industry must be familiar with health insurance policy, federal rules, and regulations, as well as specific tax laws related to healthcare. This is where the hospital or healthcare provider's management team collaborates with the healthcare finance professionals to administer the organization's budget. Together they address issues surrounding the allocation of financial resources, provide analysis of the organization's spending, and projections of the organization's financial future.
Eliminating unnecessary costs and improving quality are important to healthcare finance and require two vital skill sets. The first is an in-depth knowledge of how patient care is delivered and how to improve it. These skills are relevant to clinicians, or those with direct patient care access. The second is refined data analysis and reporting, which is inherent in the finance departments of hospitals and health systems.
The difference between financial and managerial accounting is simply the end users of the information. This is no different in a healthcare setting than that of any other organization. Financial accounting provides reporting for external usage, such as for creditors and lenders who monitor the organization's ability to meet its financial obligations.
Government agencies also use the reporting from financial accounting to ensure appropriate tax payments and to regulate business activities. On the other hand, Managerial accounting is for an organization's internal usage. Business managers need accounting information to help them in making sound business decisions for the organization.
The managers within a healthcare organization will generally have one of three views: 1) financial, (2) process, or (3) clinical. The way they manage will be influenced by which view they hold.
• The financial view: These managers generally work with finance on a daily basis. The reporting function is part of their responsibility. They usually perform much of the strategic planning for the organization.
• The process view: These managers generally work with the system of the organization. They may be responsible for data accumulation. They are often affiliated with the information system hierarchy in the organization.
• The clinical view: These managers generally are responsible for service delivery. They have direct interaction with the patients and are responsible for clinical outcomes of the organization.
An organization cannot achieve outstanding healthcare delivery without exceptional systems for collecting, maintaining, leveraging, and disclosing patient health information. This begins with the HIM department and management of the following performance indicators:
• Number of Unbilled accounts receivable days
• End user adoption of electronic health record (EHR) implementation
• Quality data and accurate reporting of patient health information
• Customer care and satisfaction with services provided
• Compliance with state and federal accreditation
• Employee satisfaction and performance
Part 2: Four recognized elements of Financial Management:
• Planning: identifies the steps that must be taken to accomplish the organization's objectives. Thus, the purpose is to identify objectives and then to identify steps required for accomplishing these objectives
• Controlling: makes sure that each area of the organization is following the plans that have been established. One way to do this is to study current reports and compare them with reports from earlier periods
• Organizing and directing: decides how to use the resources of the organization to most effectively carry out the plans that have been established purpose is to ensure effective resource use and provide daily supervision
• Decision Making: makes choices among available alternatives. Decision making actually occurs parallel to planning, organizing and controlling. Key is to make informed choices.