Describe the environmental forces that affect health care operating budgets.

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In 4–5 pages, describe the environmental forces that affect health care organization budgets. Propose a budget that includes organizational improvements. Explain how the budget aligns with the target profit margin and how financial performance will be measured.

Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

· Competency 1: Develop financial strategies to address dynamic environmental forces. (L24.2, L24.5, L17.2)

1. Describe the environmental forces that affect health care operating budgets.

1. Explain how financial performance will be measured.

. Competency 3: Develop a budget that integrates organizational improvements with sound financial analysis. (L8.4, L3.3)

2. Explain how an operating budget aligns with an organizational target profit margin.

2. Explain how financial performance will be measured.

. Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration. (L6.1, L6.2, L6.3, L6.4)

3. Write content clearly and logically with correct use of grammar, punctuation, and mechanics.

3. Format citations and references using APA style.


Health care organizations must meet basic clinical and financial targets to remain viable. The Affordable Care Act and the advent of accountable care organizations require increased attention to and skills for meeting internal organizational targets. Reimbursement from government payers is increasingly linked to effective management of meeting expected performance measures. To do this, you must understand the concepts of internal and external benchmarks, the necessity for performance measurement, and how to determine appropriate targets relative to the type and size of the organization. It is helpful to ensure that, when comparing organizational outcomes data, the external benchmark is comparable.

Effective management in health care requires competence in health care finance. Successful health care executives not only understand operating, capital, and revenue budgets, they also understand why each of these budgets is important to an organization and which groups of stakeholders need to remain apprised of the status.

Questions to Consider

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community.

. How can internal benchmarks be used to help identify best practices within an organization?

. How might an organization use external benchmarks to measure and monitor performance?

. What is a scorecard, and how is it used to track financial performance?


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