Question

Healthcare Financing references page citing the source needed

Why is financial management important to healthcare organization?

Answer 1

First of all we need to Understand what is Financial Management.

Financial Management: Financial Management Means Managing the finance it includes various aspects like investing the surplus funds, raising the funds as and when required, Minimising risk of losing money and Maximizing the returns.

Financial Management is used by each and every Organization and has its own value in terms of respective Organisation.

When it comes to Healthcare Organization, Than Financial Management helps in following ways.

1. Planning of funds.

2. Deploying of funds.

3. Utilization of funds.

4. Raising of funds.

These are the various activities undertaken by Financial Management in the Healthcare Organisation.

Importance of Financial Management in the Healthcare Organisation

1. It provide an estimate for the required funds for maintaining the facilities for the patient.

2. Purchase of Various Equipments, Machines and tools are possible if Finances are managed properly.

3. If Organisation do not have sufficient fund then they will not be able to treat the patients on time due to lack of facilities, tools, and other required medicines.

4. Managing Working capital to manage day to day task in the organisation.

5. To deploy unutilized to the avenues which will generate good returns.

6. Manage and Analyze the Cash flows of the Organisation which is a crucial part for HEalth care.

7. Maintaining all insurance related work for the patients. (For Example: Now a days many insurer provides facilities of Cashless treatment for that purpose Hospitals need to maintain the funds to treat the patients).

8. Reporting of financial status of Organisation to the Management so that they can identify the operational and Financial health of the institution.