Memorial Hermann is a hospital system that has been facing some serious financial issues regarding its operations and meeting its vendors' financial obligations. Mr. Jones, the chief executive officer (CEO), called a meeting of some of the administrative managers for them to share their viewpoints on how to move forward.
Write a 3-page response and include the following:
Describe the 3 viewpoints of the health care managers on how to move forward.
Explain why these viewpoints are important in health care financial management.
Answer the following:
Discuss how the elements of financial management relate to the function of the health care manager.
Examine why it is important for health care managers to understand financial principles.
What information do income, liabilities, assets, profits tell the health care manager?
How does the function of a health care financial manager or chief financial officer (CFO) relate to the understanding of these concepts?
What are the current challenges affecting health care financing at Memorial Hermann?
How should these challenges be mitigated?
Full Answer Section
Mr. Jones, the CEO of Memorial Hermann, has called a meeting of some of the administrative managers to discuss how to move forward. The managers have three different viewpoints on how to address the financial crisis:
Viewpoint 1: Cut Costs
The first viewpoint is to cut costs. This could involve reducing the number of employees, cutting back on supplies, or negotiating lower prices with vendors. This viewpoint is supported by the CFO, who believes that the hospital needs to reduce its expenses in order to become financially sustainable.
Pros:
- Reducing costs can help to improve the hospital's bottom line.
- It can make the hospital more efficient and competitive.
- It can free up resources that can be used to improve patient care.
Cons:
- Cutting costs can lead to job losses and decreased morale.
- It can reduce the quality of patient care.
- It can make it difficult for the hospital to attract and retain top talent.
Viewpoint 2: Increase Revenue
The second viewpoint is to increase revenue. This could involve raising prices, increasing the number of patients, or expanding into new markets. This viewpoint is supported by the COO, who believes that the hospital needs to find new ways to generate income.
Pros:
- Increasing revenue can help to improve the hospital's bottom line.
- It can make the hospital more competitive.
- It can free up resources that can be used to improve patient care.