COVID 19 pandemic has presented an array of fiscal challenges and rapid changes to all industries today, especially healthcare. It has increased in complexity. Challenges such as high cost of medical care and maintaining financial health and flexibility. Healthcare executives must address these changes to maintain a strong and well-organized financial foundation and efficient care to all their patients. Healthcare should put a high priority on financial management to achieve financial stability and improve the operational activity of the business organization. 

ROLE OF FINANCIAL MANAGEMENT IN HEALTHCARE 

Healthcare organizations, like any other business organization, rely on financial management to operate. What is financial management then? People frequently mix up financial management and accounting. We can’t disagree with that. Accounting and financial management are intimately connected. However, the accountant’s primary responsibility is to collect and present financial data. It is a method of identifying, measuring, classifying, and recording financial transactions and the performance of a specific business entity. 

Financial management, on the other hand, focuses on managerial activities such as planning, directing, monitoring, deciding, and controlling an organization’s available funds. They evaluate financial information prepared by accountants. They also oversee the organization’s financial status and implement financial plans. Its primary goal is to improve its financial health, either by generating income or adding related resources. 

So, what exactly is the role of financial management in healthcare?  

1. Evaluation and Planning– Financial managers carefully assess the effectiveness of the healthcare industry’s existing operations. The overall financial health of the organization is also reviewed and planned for its financial success. 

2. Investment Decisions– The success of healthcare depends on future investments. Financial management entails making large investment decisions. They ensure that decisions about the acquisition of fixed assets have a positive or negative impact on the organization. Examples are acquiring new facilities and equipment (fixed assets). 

3. Financing Decisions– The healthcare industry must raise funds to purchase the facilities and equipment required to support operations and meet expenditures. Financial managers can achieve these through a variety of methods, such as loans, funds, equity capital, and fundraising. Usually, the senior manager makes the final decisions on the correct method to use. 

4. Risk Management– The current pandemic has increased numerous risks in the healthcare industry. Financial management aims to reduce both patient health risks and financial and liability risks. 

5. Contract Management– Healthcare executives are responsible for a large number of contracts. Financial managers ensure that contracts are managed efficiently to avoid mistakes, reduce operating costs, and provide the best possible care to patients. 

6. Protecting Tax Status– It’s vital for the healthcare industry to focus on compliance with tax-exempt laws and regulations to avoid losses. Financial management creates a barrier against federal and state tax liability to maintain nonprofit status. 

HWA’s FINANCIAL MANAGEMENT TEAM 

HWA understands how big and complicated the healthcare industry is today. Our financial managers have adapted to innovative solutions and care to guarantee the organization’s efficiency and profitability. As previously stated, financial managers are responsible for the organization’s financial well-being. We are trained, skilled, and experienced financial experts who are ready to take on complex responsibilities. Our services possess strong organization, problem-solving, leadership, and strategic thinking skills to achieve healthcare’s long-term financial success. 

It’s time to seek creative financial advice and solutions from the experts. Let your financial future be strategized today. Visit us at https://www.hwaalliance.com/healthcare-industry/ or contact us at https://www.hwaalliance.com/contact/ for more information about our services in the healthcare industry. 

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