Hospitals and healthcare facilities are places of safety and healing, holding a higher station than other architecture and infrastructure. But at their heart, all healthcare facilities are businesses that must break-even to generate more profits than expenses. A private hospital relies on the business acumen of its chief executive officer (CEO) and chief financial officer (CFO).
These C-suite executives steer healthcare facilities towards adequate resource management, talent acquisition and retention, expense management, and revenue generation. Like all other business enterprises, healthcare facilities treat their patients as customers who must get their money’s worth. Healthcare administration ensures operational preparedness to meet consumer demands with state-of-the-art facilities, top healthcare talent, and savvy supply chain management.
Healthcare emergencies, such as the ongoing COVID-19 pandemic, create unprecedented crises and financial strains for healthcare facilities. The business acumen of healthcare administrators plays a crucial role in steering healthcare organizations away from economic turmoil. Keep reading to learn more about the role of business acumen in healthcare.
Budgeting & Resource Management
Hospitals must manage their resources efficiently to avoid supply shortages during critical treatments and procedures. Healthcare consumers demand preparedness, quality, and efficiency from private facilities to address their needs with utmost diligence. Hospitals and healthcare facilities take numerous measures to maintain sufficient stockpiles of pharmaceutical supplies, medical equipment, and tools.
Budgeting is a crucial aspect of healthcare administration, and leaders must factor in growth forecasts, stakeholder inputs, and resource planning. Health systems thrive on thoroughly planned, future-focused budgets to maintain their standards of quality care. There’s a growing demand for financially savvy healthcare administrators to lead facilities towards efficient financial management.
Professionals serving the healthcare industry can expand career advancement opportunities by pursuing marketable skills and qualifications. Executive healthcare leaders pursue higher education to supplement their experience with advanced knowledge and emerging practices. Healthcare administrators should consider pursuing an MBA program in healthcare administration to advance their career towards the C-suite.
An MBA in healthcare administration will expand your insight into healthcare operational and capital budgeting needs. It will instill effective problem-solving techniques to overcome staffing shortages and develop strategies to regulate expenses and boost revenues. A master’s program allows healthcare administrations in-depth exposure to healthcare financing, capital investments, supply chain management, and digital literacy.
Healthcare administrators lead hospitals and facilities towards efficient preparedness levels by forecasting future needs and ensuring the availability of resources.
Designing & Implementing Patient-Centric Models
The emergence of patient-centric models is a noteworthy trend that has enveloped the healthcare sector in the wake of the pandemic. Healthcare consumers worldwide demand facilities to prioritize their needs and wellbeing above all financial considerations. The private sector has come under fire, which is notorious for overcharging and denying quality care to those who cannot afford it.
Healthcare consumers are vocal about their needs, and governments worldwide are responding positively to the creation of patient-centric models. Private healthcare facilities struggle to embrace patient-centric models because expanding affordability compromises revenue generation and profitability. Several stakeholders run hospitals and clinics, including administrative and executive leaders, investors and financiers, and shareholders.
Business-minded administrators tackle the pressure of offering affordable patient care without compromising revenue generation and productivity. Executives achieve this goal by regulating and reducing expenses, finding cost-efficient vendors and supply chain partners, and refining healthcare offerings. The administrative and executive team must obtain feedback from all stakeholders before implementing any decision that undermines profitability.
Healthcare facilities hire financial advisors and experts to address patient needs and preferences without losing sight of core profitability models.
Tackling Economic Slowdowns & Financial Turmoil
Have you noticed how hospitals and healthcare facilities seem immune to economic slowdowns, recessions, and turmoil? Doctors, nurses, and other healthcare practitioners enjoy job security, boom or recession, and healthcare supply chains remain undisturbed. While this is true from a consumer’s perspective, only healthcare administrators are privy to the operational secrets for tackling financial turmoil.
Like all businesses, hospitals succumb to the financial pressures of economic slowdown and recessions. The ongoing COVID-19 pandemic is a fine example of how economic and healthcare crises overwhelm and undermine healthcare facilities. Hospitals rely on financial planning to deal with an influx of patients needing critical care while struggling with staffing and resource shortages. Administrators rely on forecasting and data-driven projections to assess demand and supply and replenish stockpiles.
Hospitals need savvy operational planning to ensure preparedness and overcome shortages to address patient needs with the highest quality standards. Healthcare executives work closely with financial institutions and governmental organizations to gain financial relief and prevent capital shortages.
Struggling to Comply with Subsidized Care Packages
In the wake of the pandemic, governments have acted promptly to satisfy rising consumer demand for affordable healthcare. Subsidized healthcare programs like Medicaid and Medicare offer patients and underserved communities tremendous advantages by enhancing accessibility and affordability. But these subsidized packages do not align with the profitability and revenue-generation models of healthcare facilities.
The glaring health equities and inequalities, which existed long before the pandemic, have become too visible, fueling the fire for social unrest. Governments have made lofty promises for subsidized and affordable healthcare without consideration to the business models of healthcare facilities. Private hospitals and clinics operate on the dynamics of demand and supply.
It’s pertinent to note that private facilities serve consumers who can afford their standard of care and quality. They strive to provide their consumers with state-of-the-art medical care, well-equipped facilities, and innovative treatments at staggering costs.
The real challenges stem from the governments’ inability and delays in reimbursing private healthcare facilities for complying with their subsidized programs. Hospitals in the United States struggle to collect reimbursement for offering subsidized healthcare. The reimbursement shortages have deprived private facilities of billions of dollars in revenues, dismantling their financial models.
Administrators and financial specialists help healthcare facilities overcome these challenges by raising capital, managing expenses, and building lucrative industry connections.
Business acumen and financial planning play crucial roles in steering healthcare facilities towards profitability and operational preparedness. Contrary to popular belief, healthcare facilities operate as corporations focused on regulating expenses and expanding profits. From managing healthcare staff to maintaining inventory stockpiles, every aspect of healthcare management demands business expertise.
Emergencies like the COVID-19 pandemic create formidable challenges for healthcare administrators, forcing them to concentrate their business acumen on problem-solving. Governments provide relief to consumers, which further exacerbates the challenges of profit-focused healthcare facilities. Healthcare leaders strive to find a balance between profitability and patient-centric models.