MHA FPX 5006 Assessment 4 Operating Budget Proposal MHA-FPX 5006 Health Care Finance and Reimbursement Prof. Name:

Date

Operating Budget Proposal

It is considered mandatory for almost all healthcare organizations to have an operational budget plan because it enables investors to predict both the revenues and expenditures that will be spent at the institution. To ensure that the healthcare organization can both accomplish its medical goals and realize its anticipated profitability, it is crucial that the preparatory process takes environmental factors that influence the budget proposal into consideration (Saviano et al., 2018). Here is a thorough operating budget proposal for a healthcare organization. In addition to its usual expenses, it has chosen to improve operations by purchasing a billing system and MRI equipment.

Environmental Factors Affecting the Operational Budget

A healthcare yearly budget is impacted by or is likely to be impacted by environmental conditions. Certain variables, which might affect a company’s monetary characteristics, may be extrinsic or intrinsic. Workers, organizations, finances, and organizational values are internal strategic factors. The internal factors of a corporation are largely composed of its workers. The project objective and the industry’s objectives must be understood by all workers (Krastanov et al., 2019). To fulfill and even surpass such standards, the right equipment, instruction, and assistance must be given to them. Another important element of the organizational context of a firm is governance. Organizations require capable leaders with a distinct future vision, a strategy for achieving objectives, and a means of gauging performance. Finance plays a role in whether an organization will succeed or fail. The amount of personnel who can be recruited, the reliability of the equipment, and the operating system can all be impacted by a lack of funding (Al Ahbabi & Nonane, 2019).

Modifications in certain laws and ordinances influencing medical centers, as well as adjustments to regulatory requirements, are a few instances of environmental variables. The Affordable Care Act’s Section 3025 lays forth requirements for the Secretary of the Department of Health and Human Services (HHS) to carry out the Health Readmission Reduction Program. The primary goal of the healthcare recurrence management program is to increase citizens’ access to healthcare by decreasing compensation to IPPS institutions for excessive hospitalizations by tying institution compensation to the level of treatment they offer.

MHA FPX 5006 Assessment 4 Operating Budget Proposal

Under the program, institutions that report more hospitalizations than the predetermined number for three weeks are vulnerable to financial penalties (Chen & Grabowski, 2017). The Hospital Readmissions Reduction Program (HRRP) of the Affordable Care Act (ACA) imposes fines on patients who have an excessive number of hospitalizations within a predefined timeframe for conditions including lung infection, cardiac arrest, elective principal hip replacement, and knee replacement (Gai & Pachamanova, 2019).

Modifications in conformity are another environmental factor that has an impact on a healthcare organization’s operating budget. Every healthcare organization must have a crisis preparation plan, according to the Center for Medicare and Medicaid Services (CMS) (Berwick & Gilfillan, 2021). No medical establishment is excluded from this crisis preparation law’s requirement to adhere. Provisions of the act apply to institutions that do not follow the program. Healthcare facilities must develop a contingency plan, experiment with it, implement modifications to their correspondence, and analyze their teleworking capabilities. They must also assess the entire plan as a component of the conformance initiatives. Developing staff competence through developing people using their own funds is one aspect of conformity (Cascardo, 2017).

Proposed Organizational Budget for Improvement

The investors’ intentions to purchase a billing system as well as MRI equipment as a component of the initiatives aimed at organizational changes are incorporated into the budget. The MRI machine will contribute to better patient care by aiming to cut down on misdiagnosis related to patient evaluations. The device produces incredibly sharp and precise photographs of the tissues. Additionally, the hospital’s customer base will rise because owning an MRI machine will allow it to serve more clients, given that few nearby institutions have one and can compete on price (Faria et al., 2018). By sending patients that require MRI scanner solutions to other medical centers immediately, the institution incurred losses; however, purchasing the machine will improve revenue and boost the clinic’s audience. In addition, a billing system will assist the health center in achieving one of its targeted c