1.The Institute of Medicine suggests that every healthcare organization should focus on providing care that is safe, effective, patient-centered, timely, efficient, and equitable. Discuss methods in which these values may be incorporated into the budget strategizing process.
The values of safe, effective, patient-centered, timely, efficient, and equitable care should be incorporated into the organization’s mission. The mission forms the base for the formulation of strategic plans, strategic goals, and objectives. These components of strategic management then form the basis for the formulation of financial plans. In effect, therefore, incorporation of these values into a health care organization’s mission enables the conceptualization of strategic plans, goals, and objectives which are operationalized in financial plans. Operationalization of such objectives is achieved through budgeting decisions on issues such as patient-staff ratios, patient volumes (Aiken et al., 2012), purchase of essential medical equipments and technologies, provision of funds for staff education, and staff salaries. These issues impact on the safety, quality, efficiency, patient-centeredness, timeliness, and equitability of patient care (Agency for Healthcare Research and Quality, n. d.).
Another method of entrenching these fundamental values into the budgetary process is through enactment of policies that provide a framework for the translation of these principles during the budgeting process. For instance, policies on nurse staffing patterns and quality improvement initiatives. Involving all stakeholders such as health staffs, patients, and the community in the budgetary process is yet another method of enhancing equity in the provision of care. This ensures that the budgetary process is transparent and it provides an opportunity for the needs of the various stakeholders to be addressed.
2. Strategic management is the organization's foundation plan for reaching goals and objectives. Describe the situation, external and internal analysis.
External and internal analysis also called the SWOT analysis is the process via which the management of an organization periodically assesses in a systematic manner its internal and external environments. The external environment is analyzed for threats and opportunities whilst the internal environment is assessed for strengths and weaknesses (Gadiesh & Gilbert, 2001). External environment factors that can be analyzed include demographic, economic, technological, social, political, and educational factors and how they impact on the organizations external opportunities and threats. Competition from other firms is a threat to an organization. The chance to expand to other markets, on the other hand, is an example of an opportunity for the organization. Internal analysis focuses on aspects such as effectiveness of the size and structure of the organization, information systems, financial and human resources, research and developmental capabilities.
How might the organization's strategic plan influence financial decision making?
A strategic plan, a key component of strategic management delineates the organization’s overall mission and vision, strategic priorities as well as the financial goals/targets to be achieved to support the pursuit of these priorities. The strategic plan identifies the objectives that will foster achievement of the organization’s mission and delineates specific programs or services that need to be pursued during the planned period. Therefore, strategic management influences financial decisions in two major ways (Sussman, 2003). It redefines the approach through which financial decisions are made. Budgeting in strategic management is not done in exclusion but is integrated with the processes of strategic planning, capital planning, and financial planning. The strategic plan also determines the areas of focus of financial decisions at the organizational and department levels. Decisions on investment and spending are geared towards achievement of the goals and objectives of the strategic plan and in the long run, the organization’s mission.
Agency for Healthcare Research and Quality (n. d.). Efforts to reduce medical errors: AHRQ’s response to senate committee on appropriations questions. Retrieved from http://www.ahrq.gov/qual/pscongrpt/psini2.htm
Aiken, L. H., Sermeus, W., Van den Heede, K., Sloane, D. M., Busse, R., McKee, M., BruyneelL, A. M., Griffiths, P., Moreno-Casbas, M. T., Tishelman, C., Scott, A., Brzostek, T., Kinnunen, J., Schwendimann, R., Heinen, M., Zikos, D., Sjetne, I. S., Smith, H. L., & Kutney-Lee, A. (2012). Patient safety, satisfaction, and quality of hospital care: cross sectional surveys of nurses and patients in 12 countries in Europe and the United States. BMJ, 20 (3440, e1717.
Gadiesh, A. & Gilbert, J. (2001). Frontline action. Cambridge, MA: Harvard Business School Publishing Corporation.
Sussman, J. H. (2003). Strategic budgeting: A healthcare imperative. Northfield, IL: Kaufman, Hall, & Associates.