Running Head: REFLECTIVE JOURNAL
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3-2 Reflective Journal: Mini Case Study
IHP450
SNHU
REFLECTIVE JOURNAL
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Physician owners can adopt a number of measures to improve their profitability without
increasing the rates of the products. For increasing profits, it is essential to understand the
association between costs and expenses. Cost primarily refers to expenditure, whereas expense
refers to the consumption of an item or commodity that has been acquired. So, the cost can be
considered to be the money that is spent on acquiring an asset. On the other hand, the expense is
the amount that is spent while consuming the asset. The formula relating to profit is presented
below:
Profits = Revenue – Expenses
In the equation, profit is the money that is remaining after deducting expenses from
revenue or income. Revenue is the income that is earned by an organization, and expenses refer
to the money that is paid by an organization. While trying to increase the profitability of an
entity, it is equally necessary to try not to let the cost and expenses rise. An effective method is to
ascertain the break-even point. It is the specific point at which the revenue and the costs are the
same, and thus there is no profit or loss.
• The first recommendation to increase the profitability of a physician owner without
increasing the rate involves ensuring the receipt of reimbursement of services that have been
rendered. For maximizing the reimbursement that is received, it is necessary to ensure that the
staff has expert knowledge of coding. By making sure that they have the necessary skills so that
proper coding can be done and the possibility of leaving out potential reimbursements can be
eliminated.
• Another recommendation is to upgrade the collections that are made at the very point of
service. In order to increase profitability, it is essential to collect deductibles as well as copays
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when the services are delivered to the end-users. The staff who sits at the front desk must have a
thorough understanding of what is due from which customer. The insight can help them to put in
consistent efforts to collect the money for rendered services.
• Another effective measure for increasing the level of profitability in the healthcare setting
is by reducing the expenses that are incurred. Avoidable expenses need to be managed carefully
since they have the potential to erode the overall profitability. For reducing unnecessary
expenses, the staff can be given proper training so that they can carry out their roles and
responsibilities efficiently. o o
References
Nowicki, M. (2021). Introduction to the Financial Management of Healthcare Organizations .
Buy Introduction to the Financial Management of Healthcare Organizations (Gateway to
Healthcare Management) Book Online at Low Prices in India | Introduction to the
Financial Management of Healthcare Organizations (Gateway to Healthcare Management)
Reviews & Ratings. Retrieved May 18, 2022, from https://www.amazon.in/Introduction-
Financial-Management-Healthcare-Organizations/dp/156793904X
