Final project

Financial Principles

Health organizations ways in which health care organizations utilize financial principles to guide their strategic planning in ensuring compliance with third-party payer submission requirements. One such principle is the accrual accounting method. A physician practice, for instance may maintain its accounting records on either cash basis or accrual basis. In the cash basis model of accounting, revenues are often documented when cash is received, while expenses are recorded when cash is spent. Additionally health providers often develop cost accounting practices with their administrators and associate administrators. These often include preparing unit budgets, presenting them for approval, and revising and combining them into organizational budget.

Compliance Standards

Coding, billing and reimbursement compliance is an important component for health care payment. Although most of the publicity for improper payments relate to the statutorily established payment systems such as Medicare, compliance is also important when it comes to health care payments for third-party payers. The main difference is that private third-party payers such as insurance holders focus on contractual compliance. This implies that whatever is in the contract and associated companion manuals provides the framework for preventing appropriate payment compliance within the contract itself. With such legally established payment systems, criminal prosecutions are often rampant. The litigations in contractual compliance generally focuses on overpayment at the civil levels.

Reimbursement Methods

Fee-for-service and episode-of-care are the two main reimbursement methods that are used in third-party payer systems. The former method, for instance, is a health care payment model in which providers receive payment for each service that they render. Fee-for-service is a commonly used method for calculating health care reimbursement (Casto & Forrestal, 2013). A fee is the set amount of price. Fee-for-service means a specific payment that is made for each specific service provided. The latter approach, on the other hand, operates as a health care payment method in which providers receive one lump sum for all the services that they offer related to a condition or disease. Under this arrangement, the unit of payment is the episode, not each individual health service. Thus, the episode-of-care model eliminates individual fees or charges.

Reimbursement Strategies for Low- and High-performing Health Systems

There are various reimbursement strategies that can be employed for low and high-performing health care systems. Low-performing ones, for instance, can utilize value-based payment to provide them with the sufficient resources to deliver more efficient, quality care. High-performing ones, on the other hand, can use episode-of-care payment and comprehensive care systems to prevent health problems.

Operational and Strategic Planning in Healthcare

Pay-for-performance Incentives

Using effective pay-for-performance strategies is important in optimizing reimbursement. The p4p, for instance, can be structured tom pay physicians and hospitals an amount that is above the basic payment for a service when they provide medical processes that are believed to improve health outcomes. This is especially the case when health providers invest in structures that improve health outcomes (Nicholson et al, 2004). For instance, p4p programs should provide incentives for offering specific processes, such as eye examinations for diabetic patients or beta blockers for heart attack patients. Additionally, the programs can be more effective if the payers provided more sufficient direct payments for processes whose significance is well understood and generate better outcomes.

Operational Performance Measures

There are key measurement areas that can be utilized to assess operational performance. Such areas include population health, individual health outcomes, clinical quality and appropriateness, as well as responsiveness of the health system. Population health outcomes are areas that can be measured by assessing the aggregated data on the health of the population. Examples of such measurements or indicators include years of life, life expectancy, avoidable mortality, as well as disability-adjusted life years (Smith et al., 2009). Individual health outcomes, on the other hand, can be assessed using metrics such as generic measures (short form 36 and EQ-5D) and disease-specific measures.

Teamwork and Strategic Planning

Promoting teamwork in health care settings is a critical strategic planning tool for business organizations. A health setting that support efficacious teamwork can improve the quality of patient care, enhance patient safety, and minimize workload problems that increase burnout among health professionals (Rosen et al., 2018). Teams work most efficaciously when they have developed a clear purpose, good communication, coordination, protocols, as well as operational procedures. The active participation of all parties is another key element of productive teamwork. Successful teams should recognize the professional and personal contributions of all members.

Communicating Strategic Planning across Teams

Communication forms an integral component of the strategic planning process. This effort is particularly important in enlightening all team members on the importance of embracing recommended change (Rosen et al., 2018). One of the most effective communication model is open communication. This approach embraces two-way exchange of information between leaders and their subordinates. Two-way interactions create room for feedback, which is essential for communication.

Financial and Reimbursement Strategies

Value-based reimbursement is one of the most effective financial and reimbursement approaches that can be employed in strategic planning. This approach shifts from volume to value and continues to evolve over time. Additionally, financial analytics should be applied to budgeting, especially with the use of historical data.

References

Casto, A. B., & Forrestal, E. (2013). Principles of healthcare reimbursement. American Health

Information Management Association.

Nicholson, S., Pauly, M. V., Wu, A. Y. J., Murray, J. F., Teutsch, S. M., & Berger, M. L. (2008).

Getting real performance out of pay‐for‐performance. The Milbank Quarterly, 86(3),

435-457.

Rosen, M. A., DiazGranados, D., Dietz, A. S., Benishek, L. E., Thompson, D., Pronovost, P. J.,

& Weaver, S. J. (2018). Teamwork in healthcare: Key discoveries enabling safer, high-

quality care. American Psychologist, 73(4), 433.

Smith, P. C., Mossialos, E., Leatherman, S., & Papanicolas, I. (Eds.). (2009). Performance

measurement for health system improvement: experiences, challenges and prospects.

Cambridge University Press.