Health Care Budget

Health Care Budget

Everyday Managing a health care organization is a hard task, with the cooperation from the community will provide excellent service and responsibility of keeping the organization profitability and viability that makes health care management a complex and difficult profession. It takes time a patient to acquire a successful business and avoiding failure budgets have to be precise.

Health care manager use planning function because it is vital in identifying goals, and objectives to take the organization main objective for the future and used it towards the current conditions (Liebler & McConnell, 2008). Therefore, the planning process, a major task is budgeting which plays a significant role in the effective direction of the organization that establish goals and financial stability.

Managers use budget to allocate the planning process when delegating financial resources, evaluating financial performance in a specific period of the organization as well as planning, control, and establish benchmarks from past year's details to pinpoint strengths and weaknesses that will permit an assertive provision of the funds (Gapenski, 2008).

Gapenski (2008), believes an operating budget is "combination of the revenue and expense budgets...and sets the profit target for the budget period" (p. 234).

Efficient and Inefficient Management Practices

Operating budget, are used yearly quarterly or even monthly at several organization to project the future yearly expenses, revenues and income statement, and identify and evaluate the variances on the present yearly budget forecasts. In 1975, Patton-Fuller Community Hospital was founded by a for-profit organization, from practicing physicians who provided excellent patient care to the community. PECH serves as any other for-profit organization to be able to enhance the wealth of the stockholders. (Albert, Brooks, Borze & Stoops, LLC, 2009).

PFCH incorporated officer's to work together in developing effective management while applying annual budgets to focus on operational decisions. The budget focus on the surrounding increase of revenues and decrease of expenses, control, and reduction of costs, and upholding a strong cash flow.

The 2009 Operating Budget, show there management team at PFCH has been practicing are using effective planning process skill because their techniques has been successful by augmenting the revenues around 10% from 2008 in comparison with not even a 6% in expenses increase. The percentage in 2010, assumption of an increase are lower from a 3% general deflation in which the rate from the prices in 2009 will into 2010 resulted from the weak economy (Virtual Organizations, 2011). The figures are as follows: Patient revenue and total revenue will increase three percent in 2010, and even if it is at a decreased rate with little or no increase in patient volume, resulting of new managed care contracts, the tendency of having a major increase