Hospital Budget

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Budgeting and budgetary control system in health care organizations has become an important topic not only because of rapidly increasing costs within the health sector, but also budgeting and budgetary control in service production generally, and in hospital services particularly raises specific theoretical and practical problems that have to be dealt with (Fallan & Petterson, and Stemsrudhagen 2004; Nyaland 2004; Fahlevi, 2014; Jackson et al).

First, a public hospital’s main objective is ensuring quality in health care services and providing treatment to as many patients as possible so as to meet health needs of a given population. But, although providing services for increased number of patients is thought of a healthy development, it also
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Because, a public hospital may legitimate budget deficits, and could justify the overspending by showing that the patients’ need exceeded the budget limits. Thus, to overspend budgets could possibly be interpreted as consequence of the hospital’s high activity level in order to fulfill its obligations towards its…show more content…
The former is represented with the hospital CEO and administrative staff, and the latter consists of clinicians (medical professionals such as doctors, health officers, nurses, and pharmacists). However, the management task is not completely left to the administrative staff. In addition to using their medical expertise to make the best diagnosis and treatment decisions, clinicians in hospitals are also responsible to manage their medical departments on a day to day basis. They have a delegated formal authority, and are thus integrated in the hospital management structure assuming such positions as head of a department or clinical managers. As managers they involve at varying degrees in issues affecting a hospital including strategic planning, and preparation of capital and operating budgets. Studies have shown that delegating formal authority for clinicians is vital to create a hospital that is not only responsive to the demands of patients but also one that is financially
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