Preparing the Alexis Rios University of ACC/HC 561 Accounting in Ruth E.

Brown September 17,

Budget Phoenix a Health Care Environment 2012

Preparing the Budget Today, managers must use an important tool to ensure accounting within t he organization is performing well. This tool is known as the budget. Differen t types of budgets exist and they vary among industries. In the health care ind ustry, managers use budgets to ensure proper usage of funds in the health care g iven to patients (Vogel, 2012). Understanding budgets helps the manager during the decision-making process, especially when trying to bring a new product or se rvice to the organization. New product or service The management at Alexis Rios Clinic, one of the branches of Getwell Clinic Inc. has proposed a new product for the optometry department where the facility is l ocated. The product proposed is a set of eye charts which will help providers t o accurately diagnose patients with visual problems because of the high aging gr oup of the population. The effect of the budget amplifies the help from the fed eral government, especially when care is provided to elderly patients (Marmor, e t. al., 2011). The implementation of this product will cost the management $80, 000 in a period of five years. With this product, the clinic will improve patie nt receivables to $220,000 which means an improvement in patient flow every year until the end of the budget. Utilization of data to prepare a budget

Principal benchmark During the proposal of the new product, the management will consider the followi ng benchmarks: organizational history, comparison with the competition locally and comparison with other facilities within the industry. The main benchmark co nsidered by the management is organizational history. The history of the organi zation in the located area has established an important relationship with the co mmunity. The distribution of services by this clinic has increase patient flow. The effectiveness of organizational culture could lead to a better health care performance (Parmelli, 2010). The management should review previous years to c ompare positive and negative trends for the clinic, especially in changes noted during the year-long proposal. This allows the management to validate the budge t proposed for the new product. Also, the information provided helps the manage ment to review the organization s strengths and weaknesses (Finkler & Ward, 2006). Explanation of the benchmarking process Understanding the proposed budget for the new product allows the management to v iew the financial situation of the clinic. During the decision-making process t o approve the proposed budget, the management at the clinic relies on benchmarki ng to determine the future of the organization. An important characteristic of benchmarking in health care is that it provides helpful data and action plans fo

r improvements to all departments in a health care treatment facility. In the h ealth care system, benchmarking is implemented because it helps managers to deci de the best cost for a product or service. In the case of Alexis Rios Clinic, the management has proven that benchmarking w ill ensure better relationship with the local population, especially when extend ing services such as the one proposed in the budget. Benchmarking helps the org anization to focus on patients and to gain their trust (Haines & Warren, 2011). Also, benchmarking is important for the health care organization because it all ows the management to promote quality improvement processes that will help with the care of patients. The promotion of a successful benchmarking process gives managers the tools needed for the preparation, coordination, and submission of b udgets. The features of benchmarking allow individuals to identify innovations in the health care industry. Conclusion Preparing a budget gives a manager the tools needed to make sage decisions when improving health care services for patients. Also, it provides a better view ab out the organizational financial status. Managers need to follow budgets becaus e it helps to achieve organizational goals (Finkler, et al., 2007). The propose d budget by the management of Alexis Rios Clinic will ensure realistic implement ation of a product that provides accurate diagnoses for patients. The manager s mai n goal is to make the best decision for the organization by using the proposed b udget and to keep the organization financially healthy. For last, the proposed budget allows the management to identify the following: areas of good practice, areas needing improvement, and priority settings to provide optimum care to pat ients (Sibbald, et. al., 2010). References Finkler, S. A., & Ward, D. M., (2006). Accounting fundamentals for health care m anagement. Sudbury, MA: Jones and Bartlett. Finkler, S. A., Ward, D. M., & Baker, J. J. (2007). Essentials of cost accountin g for health care organizations (3rd ed.). Sudbury, MA: Jones and Bartlett. Haines, S., & Warren, T. (2011). Staff and patient involvement in benchmarking t o improve care. Nursing Management - UK, 18(2), 22-25. Marmor, T., Oberlander, J., & White, J. (2011). Medicare and the federal budget: Misdiagnosed problems, inadequate solutions. Journal of Policy Analysis & Manag ement, 30(4), 928-934. doi:10.1002/pam.20606 Parmelli, E. (2010). The effectiveness of strategies to change organisational cu lture to improve healthcare performance. Cochrane Database of Systematic Reviews , (1). Sibbald, S. L., Gibson, J. L., Singer, P. A., Upshur, R., & Martin, D. K. (2010) . Evaluating priority setting success in healthcare: a pilot study. BMC Health S ervices Research, 10131-144. doi:10.1186/1472-6963-10-131 Van Baal, P. M., Feenstra, T. L., Hoogenveen, R. T., De Wit, G., & Brouwer, W. F . (2007). Unrelated Medical Care in Life Years Gained and the Cost Utility of Pr imary Prevention: In Search of a 'Perfect' Cost-Utility Ratio. Health Economics, 16(4), 421-433. Vogel, L. (2012). Dance lessons on a personal health budget. CMAJ: Canadian Medi cal Association Journal, 184(9), E444-E446. doi:10.1503/cmaj.109-4172