Question

Discuss how strategic financial planning can support healthcare organizations' decisions to move forward or discontinue services and programs

Answer 1

Concept :

Strategic financial planning determines how an organisation whether belonging to industrial sector or service sector will achieve its strategic objectives and goals. It includes :

A. Analyzes financial alternative as well as Investment alternative to ensure that scare financial resources are optimally utilised to generate maximum return on investment.

B. Sets objectives / goals, policies and budgets regarding the organisation's financial statements.

Answer :

In dynamic business environment it is very significant for business to have stretegic financial planning based on Internal Strength and Weakness coping with external opportunity and threats.

Healthcare organization provides health related services to general public. By adopting strategic financial planning model that preparing budget based on historical financial statements and conduct analysis regarding financial performance in future. It enables the healthcare organization to make significant decisons related to investment in new program or enhance the area of service or reduce the scope of program or service or even discontinue the same.

Stretegic financial planning also enables the healthcare organization to analyse costs incurred and employees measurest to reduce or control cost to ensure smooth functioning of its operations.

Strategic financial planning helps healthcare organization to determine resources required to add program or service in current level activities by preparing individual budget for the prospective program or service.

It also provides required managerial reports to facilitate the decision making process.

Thus, strategic financial planning helps healthcare organization to support decisions to either move forward or discontinue program or service by providing analysis of budgets, data regarding resources required, information about cost system used etc. Above all provides significant basis to support decisions and achieve strategic objectives with resources available.