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Financial Measurement In Health Care Essay

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The purpose of financial measurement in healthcare is to assist healthcare management in accomplishing the organization's objectives. Whether that be to generate income, respond to regulations, facilitate relationships with third-party payers, influence method and amount of payment, monitor physicians, and protect tax status (Nowicki, 2022). This is facilitated by the financial managers who make informed decisions to meet the long-term and short-term organizational goals. These financial managers must stay up to date on political, regulatory, and economic changes and trends and effectively communicate with employees, owners, customers and key stakeholders (Nowicki, 2022).

The major financial measures that are monitored by financial managers …show more content…

This is because hospital organizations can be penalized if patients are readmitted too quickly after a previous hospitalization (Hospital Financing Affects Admission and Discharge Decisions, 2016).
An example of a decision made by measuring the average daily census is that it allows hospitals to see their capacity for inpatient care and thus shows where resources and finances should be allocated based upon the needs of the patients that are within the hospital (Definitive Healthcare, n.d.).
An example of a decision made by measuring the average length of stay is improving the hospital efficiency. By reducing the number of days a patient remains in the hospital it improves the quality of treatment and increases hospital profit by improving efficiency of bed management (Baek et. al, 2018).
An example of a decision made within the healthcare system based upon occupancy rate is how much staffing should be scheduled, how many resources are required to have in hand to care for the patients, and how many beds will be utilized in the future (Logik,

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