HCA 610 Module 3 DQ 1
Higher levels of medical spending, profitability, and fiscal margins lead to better process quality in health care organizations. Higher financial stability can lead to greater process quality through the funding of preventative and wellness measures, as well as a lower length of stay. Also, good processes are required to maintain innovation, efficiency and quality of care over time.
Higher levels of medical spending, profitability, and margin will have a positive effect on process quality for health care organizations. High margins make it more likely that health care providers can invest in staff, equipment, and infrastructure to ensure their routines are followed. This leads to better patient outcomes because the routines will be followed consistently. Additionally, health care organizations with higher margins have better financial stability which allows them to keep their current patients healthy by either investing in preventative medicine or lowering the length of stay for each stay. Thus profit improves upon both cost as well as quality of care by shortening lengths of stay while reducing preventable readmissions.
Higher levels of spending, profitability, and fiscal margins can improve process quality for health care organizations. For example, higher spending on new technology and training can increase process quality, such as reducing errors and increasing the speed of care delivery. Profitability and fiscal margins can also improve process quality by encouraging efforts to attract patients to organizations that incur low risk as compared to organizations with a similar reputation but higher risk based on projected levels of service utilization. The ability to access capital through stronger balance sheets will allow health care organizations to continue to develop services and facilities that effectively manage high risk patients and stabilize revenues over time.
That process quality is highest in firms with the greatest spending on health care management indicates a positive relationship between national health expenditures, organization profitability and quality of care. Health care organizations that report greater financial stability are more likely to report better quality care. High levels of financial and cash flow flexibility are associated with increased use of preventative and wellness measures and lower lengths of stay. However, these two factors appear to be imperfect substitutes for one another—organizations with access to cash may not substitute toward prevention but may channel resources into more readily available technology.
The potential benefits from increased medical spending, profitability, and fiscal margin was presented in a 2015 article titled: “Organizational properties and financial outcomes: The role of the physician leader” (Curtin et al., 2015). Authors noted that funding for large health care organizations stems from multiple sources, specifically the US government, private insurance companies, and non-profit health foundations. Employees fall under 2 categories: physicians and non-physician providers. Curtin et al. (2015) also noted that many workers in these organizations include nurses, pharmacists, physical therapists, lab technicians as well as administrative staff in marketing or legal positions; therefore is critical that a competent management team is responsible for allocating resources.
Increasing health care spending has an impact on the quality of care. The better facilities are able to attract more patients, hire and pay more qualified employees (doctors, nurses, cleaning staff, etc.), and purchase new equipment or technology. As a result, hospitals will have lower lengths of stay for patients compared to facilities that are not financially stable. Length of stay is a performance measure used to indicate hospital efficiency. Higher spending on health care may lead to greater financial flexibility that can be used to improve efficiency as long as patients are not harmed by increasing cost sharing.
Financial stability and fiscal health are an integral part of any health care organization. Better fiscal standing allows a health care organization to produce higher quality care and serves as a foundation for a healthy environment in which clinicians and patients can thrive.
Improved medical care leads to improved profitability, and enhanced fiscal margins:
Fiscal health enables health care organizations to implement strategies that improve quality and lower costs. Achieving and maintaining a healthy financial position ultimately requires organizations to adopt and adequately resource well-recognized evidence-based strategies such as implementation of an effective performance measurement program and participation in coordinated care arrangements such as Patient Centered Medical Homes.
Patient satisfaction scores and improved patient health over time are examples of positive effects. The following list is provided for you to use as you see fit:
Describe the effect of higher levels of medical spending, profitability, and fiscal margins on process quality for health care organizations. Indicate the role of financial stability in health care organizations on their ability to adequately resource the staffing, equipment, and infrastructure that support care delivery. Specifically, what is the effect of financial flexibility in increased use of preventative and wellness measures and lower length of stay?