Question

The fates of hospitals and physicians are closely intertwined these days. In fact, the practice behaviors of physicians are crucial for determining the financial success of a hospital. Discuss the impact of physician practice patterns on the results of the hospital operating budget and capital budget. Provide specific examples to support your answer.

Answer 1

Depending on the Physician practice pattern and work directly impact on Hospital Operating budget and Capital budget. First of all we need to know what is Operating and Capital Budget. Here is the below description

Operating Budget: The major components of the operating budget include revenues and expenses: Revenue is based on charges and is the money the organization will receive for a patient visit, procedure, or inpatient hospitalization from Medicare, Medicaid, managed care, private insurers, and self-pay patients.

How it is Impact and example: The practice pattern are depends on how is the doctor and what type of medication they provide to the patient. Their behaviour to the patient, their medication, treatment .Physicians and surgeons diagnose and treat injuries or illnesses. Physicians examine patients; take medical histories; prescribe medications; and order, perform, and interpret diagnostic tests. They often counsel patients on diet, hygiene, and preventive healthcare. If all the above is good definitely the revenue will go higher and expenses come down.

Capital budget: Capital budgeting and investment appraisal. this is king of process or planning to determine long-term goal, foresee the medication, new machinery, new products,offers like that.

How it is Impact and example: If any patient go to any hospital and for the offers or medication and for the advanced machinery the cost of the patient go down or the patient fully satisfied and fit after release with the doctor's treatment then obviously the patient increase the goodwill of the hospital and thus for the revenue will increase as more patient more revenue.