Management Of Healthcare Budget During Times Of Financial Constraints (Essay Sample)

Management of a Healthcare Budget
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Introduction
Healthcare is currently experiencing constraints in budgets. It has become essential for managers of medical centers to exercise austerity measures. Administration often calls for tighter control, especially regulation of expenditure as a way of confining the healthcare center to the limited annual budget. This calls for the administrators to understand their needs so as to know the essentials that must be added for quality assurance, and by what limited margin; and the components in budget vote-heads that can be done away with. This paper focuses on essential budget moderation in conformation with introduced austerity measures, without altering quality output. The paper as well gives a critical look at the current budget and evaluates ways and means of introducing cuts and addition to the budget. In this paper, therefore, Utilizing the Concept of Accountability for Reasonableness (A4R is resourceful in times of austerity measures.
Management of a Healthcare Budget
In most low and middle-income countries, many of their healthcare systems struggle with meeting the needs of the population due to the scarcity of resources. There is always a need to increase the budgets for medical centers, but the administration is incapacitated due to the limitation of resources. As a result, it is critical that managers of the healthcare systems make decisions that balance quality and the need to confine the system to the proposed annual budget. At times, the national or regional governments may introduce cuts to the budget. It is upon the administrators to configure the best way to handle the requests. The concept of accountability for reasonableness comes in handy. As written by Voigt (Nov 2017), the concept of accountability for reasonableness (A4R) is an approach that resonates well in a situation of scarce allocation. It prompts rationing and generation of legitimate outcomes of decisions, especially on difficult questions.
The proposed budget calls for a review of overtime vote-head downward, increase in supplies and a need to train two of the healthcare providers in the medical center. Managing in a time of need to sustain and possible add quality and value in healthcare provision is a difficult adventure for any administrator in such a situation. However, in times of austerity measures, important decisions; however controversial are necessary. The resignation of the full-time nurse coupled with a need to train two nurses may balance the requirements. Essentially, cutting down expenditure on overtime is plausible. The fact that the annual budget for overtime is $50,000 dollars, and as at 1st April, the amount used is $40,000, cutting down on overtime is not a difficult decision. There was overspending on the month of March basing on the fraction expenditure expected each month of approximately $5,000. The exit of the full- time nurse means that there will be an excess amount that can be spent on supplies and an addition of a temporary part-time nurse by a margin to reflect expected monthly expenditure.
Deferring expenditure in a crucial sector such as healthcare may seem inappropriate. However, going by the concept of accountability for reasonableness (A4R), rationing, though seemingly controversial, is an idea that highly balances the equation. The exit of the full- time nurse comes in handy as the replacement can be done in the next financial year. However, doing this without compromising value is a complex issue. In the case, the way to go is to introduce a temporary part-time nurse. The part- time nurse will be paid an amount that is significantly less compared to that of the full- time nurse. This will give an opportune window to defer the situation to the next financial year. Essentially, one or both of the trained nurses may act as the replacement of the full -time nurse in the next financial year. Overtime can also be deferred as it appears as lacking urgency.
Austerity is not always the best decision that administrations can take. Critically, austerity means delaying or eventually doing away with important expenditures. In healthcare, austerity may mean reduction of value given to the patients. The demands in any form of population in regard to healthcare are always extensive. Compensating these demands with austerity measures is one of the most controversial decisions any administration can make. However, in times of making critical decisions, austerity can be augmented by measures such as defer. Defer does not mean absolute cut, it means delaying. As at April, deferring a situation to July is reasonable. In writing about Accountability for Reasonableness, Voigt (Nov 2017) argues that this concept is intended to help make decisions, especially on normative questions that always elicit reasonable disagreement. Deferring overtime and personnel expenditure, especially when the voids created can be filled up by cuts from other areas is a reasonable decision. The expenditure on overtime has to be balanced to reflect expected divide. The void in value created from the resignation of the full-time nurse can be filled using an additional temporary part-time nurse and the trained nurses.
In budget management, some decisions may be correct while others are overboard. An annual budget of $500,000 is expected to last the twelve months in a year, which equates to around $42,000 every month. When divided into the four quarters in a year, it is expected that each quarter will take up $125,000. The administration in this healthcare center got right in the expenditure for personnel. This is expected, as staff salaries may not vary in between the year. Increase or decrease in staff salaries can only be reviewed after the expiry of the financial. In this regard, therefore, the salaries are static, and can only be divided amongst the staff equally as per the vote-head budget. The budget was $500,000 and for every quarter, the figure had to be $125,000. The administration has stuck to this budget so as not to find itself with a problem of not paying staff.
There are multiple decisions in expenditure that the administration did not get right. Apart from personnel vote-head, all other expenditures were either down or overboard. Spending more than the administration can afford can be interpreted as lack of a proper budget. For example, it can be interpreted that the expenditure of $20,000 on ...