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Hospital Funding: Planning, Forecasting, and Finance Management

You work for the local hospital. In a meeting, your boss mentioned that profit margins were declining.

The hospital's board of directors' future vision is to raise the target profit, expand the facility size, and increase the amount of beds and emergency room spaces offered by the hospital. You are a staff member in the finance department, and your sole responsibility is to advance the success of the organization through assisting in planning, forecasting, and finance management.

Health care organizations obtain revenues through multiple funding sources. Unlike consumer products, health care organizations do not rely on the consumers of their services as the primary sources of revenue.

Discuss the following with your colleagues:

1. Three identified sources of revenue that may assist you in the financial forecasting for the organization
2. Three grant resources that can be included as additional revenue to ensure the success of the hospital's financial future. Explain your reasoning in choosing the grant resources listed in your answer.

Solution Preview

1. One very important source of revenue that can be helpful in financial forecasting for the hospital organization is Medicare, due to the fact that Medicare is one of the largest sources of income for most hospital organizations, including this hospital organization. This financial source will become a larger part of the hospital's overall revenue, due to the fact that the population in the area and across the nation is aging, which means that more individuals over the age of 65 will be entering the hospital for treatment, thereby increasing the number of Medicare recipients that will be treated at the hospital, and invariably increasing the percentage of ...