Running Head: REFLECTIVE JOURNAL
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3-2 Reflective Journal: Mini Case Study
IHP450
SNHU
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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
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copays 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. cc
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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
