Financial Statement and how it Affects Patient Care
Interview a Nursing Leader. Develop questions that reveal how leadership uses the financial statement to develop quality patient care. Include challenges to the process as well as successes.
Financial Statement and how it Affects Patient Care
The following are the questions I will present to my interviewee, who is a nurse leader, to reveal how leadership applies financial statements to develop quality-based patient care.
- What are financial statements?
- What are the key financial statements in health care?
- How do healthcare leaders use financial statements to measure impact for quality patient care?
- How do healthcare leaders use financial statements to determine budgets for quality patient care?
- How do leaders use financial statements to reduce unnecessary costs to guarantee quality patient care?
- For quality patient care, how do financial statements help leaders think big?
- How do leaders in healthcare use financial statements to align across departments for a common goal of quality patient care?
- Is it true that financial statements similarly help leaders in healthcare drive team motivation for quality patient care?
Question: What are financial statements?
Answer: Organization’s financial statements tell of its financial health. Financial statements reveal operations outcomes providing vital information concerning the organization’s assets, revenues, liabilities, and costs (Lane & Manager of Accounting Services.,2021). The decision-makers apply this information to monitor the performance and define optimal plans, investments, and changes for sustained growth. Similarly, it is used by owners and shareholders with a financial stake in the organization to maintain an eye on their savings.
Question: What are essential financial statements used by leaders in healthcare for quality-based patient care?
Answer: There are three key financial statements healthcare leaders must know how to read and evaluate. These include income statements, balance sheets, and cash flow statements (Cote.,2020). A balance sheets provides a picture of the organization’s financial health for a specific time. It lists liabilities, assets, and equity line by line for the stakeholders to comprehend the breakdown. An income statement outlines expenses and income during a set time. Generally presented quarterly or annually, income statement permits the healthcare leaders to compare their trends in costs and revenue over time for quality patient care. Besides, a cash flow statement specifics the outflows and inflows of the cash for a particular time. Broken down to operating activities, financing, and investing activities, the cash flow statement reveals the organization’s capacity to function on both long and short-term basis. When evaluated together, these statements afford a complete view of the organization’s financial health. They also can be applied to learn from prior drawbacks and successes as leaders plan for the future.
Question: How do healthcare leaders use financial statements to measure impact for quality patient care?
Answer: Leaders should track the impact efforts they have on the organization’s bottom line. They use financial statements to look at their organization’s income statement noting direct costs related to the income for that particular time. Maybe they purchased a specific piece of software or hired an expert for a big project. They can ask themselves whether those costs result in the net income they were aiming for. Moving ahead, these leaders may learn from their errors and double down on the savings that paid off.
Question: How do healthcare leaders use financial statements to determine budgets for quality patient care?
Answer: Financial statements are valuable when leaders plan and manage budgets (Ho.,2018). They use historical data in building budgets and use this particular date as a reference point instead of a starting point. Understanding their organization’s financial health and history is essential whenever budgeting, and they pair this understanding with a forward-thinking mind.
Question: How do leaders use financial statements to reduce unnecessary costs to guarantee quality patient care?
Answer: With the use of financial statements, the leaders can see their organization’s expenses line by line on cash flow statements and income. These point to the areas where it is likely to reduce the costs. Perhaps the organization might have been paying monthly subscriptions for service it no longer requires, or the team outings would be scaled back, favoring more cheap activities. Checking a list of each cost and how it influences organizations’ net income may be an eye-opening opportunity to save money that can alternatively be used to guarantee quality patient care.
Question: How do financial statements help leaders think big for quality patient care?
Answer: Keeping a wider organization’s health in mind is vibrant whenever managing the team. Evaluating a balance sheet, cash flow statement and income statement allow the leaders to comprehend the ins and outs of the organization’s finances, giving them a bigger picture to guide their process of goal-setting and decision making.
Question: How do leaders in healthcare use financial statements to align across departments for a common goal of quality patient care?
Answer: Healthcare leaders use financial statements to guarantee numerous departments are on the same page. When leaders from every department have evaluated statements, debates on budgeting and goals may center on a shared understanding of an organization’s financial health providing perception to other leaders for goals and motivations facilitating quality patient-based care.
Question: Is it true that financial statements similarly help leaders in healthcare drive team motivation for quality patient care?
Answer: Several leaders use their organization’s financial statements as tools to encourage and involve teams. Income statements help reveal how workers’ transactions positively impact organizations’ revenue that boost their performance, ensuring quality patient care (Cote.,2020).
Challenges To Developing Quality Patient Care
Healthcare leaders face several challenges when improving quality patient care via using financial statements. First, healthcare leaders have challenges collecting data and monitoring their systems rightly (Ahamed & Farid.,2018). Generally, active data collection services might be challenging since it mainly depends on the trust of healthcare providers and other associates in the organization. At a point, data collection can be costly to the organization. Poor data collection in the health care organization often leads to issues throughout. In case of incorrect data, the organization makes wrong decisions regarding the choice of measures to enhance quality patient healthcare.
Organizational culture, leaders’ capacity, and the context of healthcare organizations are other challenges that usually hinder progress and enhancement of quality patient care via the process of using financial statements. For instance, some care requires lengthy organizational activities and hierarchy that ultimately leads to poor communication, contributing to poor healthcare service delivery. Similarly, tribalism and lack of staff management are other significant challenges impacting the quality of healthcare provided to the clients. In some health care facilities, caregivers have a tendency to discriminate against others based on their tribes, where some individuals are exposed to an ideal approach than others. Equally, poor staff management has similarly led to poor health care services following workers’ lack of incentives. Generally, lack of incentives towards staff results in lack of self-esteem in their work, causing poor services.
Success in Developing Quality Patient Care
Some measures in developing patient health care quality involve critically evaluating the organization’s data and results to guarantee ideal improvement that would encourage healthcare delivery procedures leading to quality patient health care. Healthcare leaders have a responsibility to use their organization’s financial statements to care for several financial risks meant to hinder achieving their goals regarding establishing quality healthcare-based services to the patients. In developing quality patient care, one success is the formation of feasible plans in healthcare that has encouraged quality of healthcare services accessible, where most programs are hi-tech for ideal convenience and working.
Similarly, effective communication, particularly communication goals and the organizations’ development, has endorsed the quality of health care services. Incidence of accurate information regarding healthcare organization set goals encourages quality patient healthcare provided. All organization associates work towards attaining the organization’s goals. Conclusively, the healthcare financial statements directly relate to the quality of care provided in the organization. Financial influence and operation competence are amongst the essential factors influencing the quality of patient care (Kavosi et al.,2018). In most cases, public health care services provide low-quality care services related to the urban health care organizations that offer high-quality services. Indeed, health care organizations’ overall development, particularly on communication features, organizational culture, and equality in healthcare delivery, is amongst the most critical aspects that require consideration whenever advancing the quality of patient care.
Ahamed, F., & Farid, F. (2018, December). Applying internet of things and machine-learning for personalized healthcare: Issues and challenges. In 2018 International Conference on Machine Learning and Data Engineering (iCMLDE) (pp. 19-21). IEEE. DOI: 10.1109/iCMLDE.2018.00014
Cote. (2020, June 16). How & why managers use financial statements. Business Insights – Blog. https://online.hbs.edu/blog/post/how-managers-use-financial-statements
Ho, A. T. K. (2018). From performance budgeting to performance budget management: theory and practice. Public Administration Review, 78(5), 748-758. https://doi.org/10.1111/puar.12915
Kavosi, Z., Rahimi, H., Khanian, S., Farhadi, P., & Kharazmi, E. (2018). Factors influencing decision making for healthcare services outsourcing: A review and Delphi study. Medical journal of the Islamic Republic of Iran, 32, 56. doi: 10.14196/mjiri.32.56
Lane, L., & Manager of Accounting Services. (2021). Healthcare organization financial statements best practices | Healthcare accounting | Richter. Richter ShareSource Blog. https://blog.richterhc.com/health-care-organization-financial-statements-understanding-best-practices