Question

how does the process of allocation apply to the functionality of healthcare organizations like hospitals in determining expenditures on staffing versus equipment?

Answer 1

The term "Resource allocation" is the process of allocating and managing various resources in a way that supports an organization's strategic goals.

Resource allocation in hospital industry includes allocation and management of equipment and other tangible assets to make the best use of human capital. Health care has been a limited resource but the demand for it is unlimited, everybody need health care. Resource allocation involves prioritizing needs and determining the most effective actions to maximize the best use of limited resources and achieve the best results on investment.

By practicing resource allocation, organizations like hospitals strive to achieve their ultimate goal, such as increased revenue, improved productivity, minimized cost or brand recognition in the marketplace.   

Allocation process controls expenditure in each and every organization. In hospitals, there is allocation of new and improved machines, materials, personnel, facilities,funds and others that can be used for providing health care services. In order to allocate all these things there is requirement of huge amount of finance, so to handle the cost and allocation there are allocation managers who set targets how much to allocate, at what time and what to allocate. They control the costs by judging the requirements and maximize the revenue. For example, medical equipment are generally very expensive, so it is best to take the equipment on the advise of allocation managers or any financial experts in consultation with technicians who know which equipment is the best and less expensive in comparison to other brands. After purchasing a particular machine, it should be properly used and maintained so that hospitals can earn maximum and minimize the cost of maintenance.

Staffs are the pillars of an organization, they should be provided enough facilities to increase their productivity. Allocation of various facilities and hardware should be under the supervision of the operation manager who knows what to allocate and how much to allocate. Proper allocation of resources provides comfort to staffs and motivate them to work. This results in less employee turn over and more revenue to hospitals.

So we can conclude that, allocation process allocates various facilities and at the same time controls cost and increase revenue.