Essay4Business Finance
Print Сite this

Economics and Financial Management in Health Sciences

Drivers of Financial Performance

Healthcare companies try to improve their financial performance like any other business. These firms operate in a sector associated with high costs and risks as well as a variety of ethical issues (Friedman, 2015). The market is also highly competitive and technology-driven. Some healthcare organizations fail to develop a concise strategy aimed at maintaining appropriate financial performance. Therefore, it is crucial to understand the major drivers of the financial performance of healthcare firms.

Cleverley and Cameron (2007) identify 13 central categories of financial performance drivers. These are market factors, pricing, coding, contract negotiation, overall cost, labor costs, supply costs, departmental costs, service intensity, non-operating income, investment efficiency, plant obsolescence, and capital position. It is noteworthy that market factors often have the largest impact on companies’ financial performance. Thus, competitors, the situation in the market, and customers’ profiles (demographic and socioeconomic peculiarities of the population).

Investment efficiency is another crucial driver of healthcare firms’ performance. Managers often lack the understanding of the most promising projects. When it comes to the healthcare setting, it can be difficult to develop a strategy aimed at identifying areas for investment. Some healthcare units focus on technological development (purchasing equipment, devices), but ignore the need to develop the staff, which leads to significant losses.

Pricing is another area of concern as it may often undermine companies’ financial performance. Economic constraints in the country have made many healthcare procedures hardly affordable for many potential customers. Finally, labor costs have a significant effect on the healthcare firm’s performance as the staff of high-profile healthcare professionals is costly but crucial for any healthcare company.

Performance Measure in the UAE Hospital

Organizations tend to utilize four primary performance measures. These are the internal process, measures, key financial measures, innovation measures, and customer satisfaction measures (Joint Commission Resources, 2008). These key measures can be applied to an Emirati hospital.

As for internal processes, it is essential to take into account the efficacy of procedures employed in the healthcare facility. Such areas as delivery of services, reporting, and communication should receive the most attention (Woodbridge & Allen, 2010, p. 9-8). When it comes to financial measures, it is crucial to consider such areas as cost-effectiveness of procedures, labor costs, supply costs, overall costs. It is necessary to note that these two measures are used by the vast majority of healthcare units, but some Emirati hospitals fail to pay sufficient attention to innovation measures and customer satisfaction measures. At that, innovation and development measures can help managers to unveil issues that may arise in the future. The healthcare market is highly innovative, and advances in science and medicine, as well as technology, provide various opportunities for the development of healthcare units.

The customer satisfaction measure seems to be quite logical, but many people fail to assess it correctly. Apart from health outcomes, it is necessary to take into account the actual assessment of the patient. More so, the satisfaction of relatives and caregivers should be measured as well (Joint Commission Resources, 2008). Healthcare professionals should provide medical and emotional support to patients, and this should also be a part of performance measurement. At that, it is necessary to note that Emirati hospitals should develop a set of performance measurements based on the four key measures. Thus, each hospital’s measurements may differ due to peculiarities of location, type (hospice, hospitals for adults, children, and so on), and size.

Reference List

Cleverley, W.O., & Cameron, A.E. (2007). Essentials of health care finance. Sadbury, MA: Jones & Barlett Learning.

Friedman, L.H. (2015). Organizational excellence. In M.D. Fottler, D. Malvey & D.J. Slovensky (Eds.), Handbook of healthcare management (pp. 187-210). Northampton, MA: Edward Elgar Publishing.

Joint Commission Resources. (2008). Managing performance measurement data in health care. Oakbrook, IL: Joint Commission Resources.

Woodbridge, P.A., & Allen, G.O. (2010). Performance assessment for healthcare organizations. In Y. Yih (Ed.), Handbook of healthcare delivery systems (pp. 9-1-10-1). Boca Raton, FL: CRC Press.

Cite this paper

Select style

Reference

Essay4Business. (2022, April 14). Economics and Financial Management in Health Sciences. Retrieved from https://essay4business.com/economics-and-financial-management-in-health-sciences/

Reference

Essay4Business. (2022, April 14). Economics and Financial Management in Health Sciences. https://essay4business.com/economics-and-financial-management-in-health-sciences/

Work Cited

"Economics and Financial Management in Health Sciences." Essay4Business, 14 Apr. 2022, essay4business.com/economics-and-financial-management-in-health-sciences/.

1. Essay4Business. "Economics and Financial Management in Health Sciences." April 14, 2022. https://essay4business.com/economics-and-financial-management-in-health-sciences/.


Bibliography


Essay4Business. "Economics and Financial Management in Health Sciences." April 14, 2022. https://essay4business.com/economics-and-financial-management-in-health-sciences/.

References

Essay4Business. 2022. "Economics and Financial Management in Health Sciences." April 14, 2022. https://essay4business.com/economics-and-financial-management-in-health-sciences/.

References

Essay4Business. (2022) 'Economics and Financial Management in Health Sciences'. 14 April.

This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.

If you are the original creator of this paper and no longer wish to have it published on Essay4Business, request the removal.