MHA FPX 5006 Assessment 4 Operating Budget Proposal

Student Name

Capella University

MHA-FPX 5006 Health Care Finance and Reimbursement

Prof. Name

Date

Operating Budget Proposal

Healthcare institutions must develop operational budget plans to accurately forecast revenues and expenditures. This process ensures that medical objectives are met while achieving anticipated profitability (Saviano et al., 2018). Presented here is a comprehensive operating budget proposal for a healthcare organization, including expenses for acquiring a billing system and MRI equipment to enhance operations.

Environmental Factors Affecting the Operational Budget

Various environmental factors, whether direct or indirect, impact a healthcare organization’s annual budget. Internal strategic elements such as employees, organizational structure, finances, and values significantly influence budget considerations. Effective governance, financial stability, and workforce competence are crucial for meeting organizational goals (Krastanov et al., 2019). Additionally, changes in laws and regulations, like those introduced in the Affordable Care Act, can significantly influence financial prospects for healthcare organizations (Chen & Grabowski, 2019).

Proposed Organizational Budget for Improvement

The proposed budget includes expenses for acquiring a billing system and MRI equipment to enhance organizational operations. The MRI machine aims to enhance patient care by providing precise imaging, reducing misdiagnoses. Moreover, owning an MRI machine can attract more patients to the hospital, thereby increasing revenue (Faria et al., 2018). The billing system is expected to streamline billing processes, reduce documentation, and improve customer service (Rosenbach et al., 2017).

Budget Alignment with Organizational Target Profit Margin

The budget aligns with the organization’s goals of increasing revenue and improving patient care. Investments in MRI equipment and billing systems are essential for achieving these objectives. Additional funds are allocated for training and equipment management to ensure that new purchases contribute effectively to organizational goals (Adhikara et al., 2022).

Measurement of Financial Performance

Implementing performance measurement tools is crucial for evaluating the hospital’s financial success. By tracking qualitative and quantitative metrics, the organization can assess its economic position and make necessary adjustments to improve financial performance (Wang et al., 2018). Regular cost-benefit analyses help monitor monthly changes and establish revenue targets, contributing to the organization’s overall financial stability (Lim et al., 2018).

Conclusion

A comprehensive operating budget must consider all environmental factors affecting the organization and provide mechanisms for assessing financial performance. By analyzing various financial sectors and adopting long-term budgeting strategies, healthcare organizations can navigate economic uncertainties and ensure sustainable growth (Saviano et al., 2018).

References

Adhikara, M. A., Diana, N., & Basjir, M. (2022). Organizational Performance in Environmental Uncertainty on the Indonesian Healthcare Industry: A Path Analysis. Academic Journal of Interdisciplinary Studies, 11(2), 365-365.

Al Ahbabi, A. R., & Nonane, H. (2019). Conceptual building of sustainable financial management & sustainable financial growth. Available at SSRN 3472313.

Berwick, D. M., & Gilfillan, R. (2021). Reinventing the Center for Medicare and Medicaid Innovation. JAMA, 325(13), 1247–1248.

Brooks-LaSure, C., Fowler, E., Sihamoni, M., & Tsai, D. (2021). Innovation at the Centers for Medicare and Medicaid Services: a vision for the next 10 years. Health Affairs Blog. August, 12.

Cascardo D. (2017). Preparing to Meet the New CMS Emergency Preparedness Rule. The Journal of Medical Practice Management: MPM, 32(5), 301–303.

Chen, M., & Grabowski, D. C. (2019). Hospital Readmissions Reduction Program: Intended and Unintended Effects. Medical Care Research and Review: MCRR, 76(5), 643–660.

MHA FPX 5006 Assessment 4 Operating Budget Proposal

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