Discussion 3 PDF

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Summary

After reading and analyzing the Los Reyes Hospital (A) case study, discuss the importance of departmental budgets and the discoveries you made from exploring the Los Reyes Hospital case. When responding to peers, describe the consequences of poor budgetary decisions....

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After reviewing the Los Reyes Hospital case study, you realize just how important having departmental/capital budgets really are. As stated in the text, “capital budgeting decisions are the fundamental importance to the success or failure of any business because a firm’s capital budgeting decisions, more than anything else, shape its future” (Song & Pink, 2019). As a healthcare leader it important to be connected to your departments and making sure their leadership is aware of what the department needs are. The more you are connected and know about the true needs, organizational running’s and the next level of advancements you can categorize appropriately and budget money accordingly, in the long run helping the healthcare organization save money. Where I work, we all have departmental budgets that ultimately get a approved or denied for edits by the chief of finance in a similar fashion to the case study. We must be able to accurately predict what initiatives, programs and incentives we want to have in place and match those up with data to help prove the number of payouts or cost to the department would be for additional supplies if needed. While reading the case study is quickly identified that Mr. Cohn the Chief Financial Officer was ill prepared for creating a budget and needed to seek some assistance. It was very smart of him to include the physician’s chiefs and department managers to formulate the budget. While using the four cases for the departments to base their budget on he quickly realized it would not give an accurate picture because they cover many more cases than just those four. Mr. Cohn hopes that while using those four studies he can show the Chief of Medicine and prove the value of the process for completing a budget and just how useful and truly needed it is. If you want to succeed in the business you need to be able to budget and have your finances in order, you don’t want to have a large chunk of unexpected costs driving you into the group that you could have semi forecasted for.

References: Pink, G. H., & Song, P. H. (2019). Understanding Healthcare Financial Management (8th ed.). Health Administration Press. Young, D. W. (2013). Los Reyes Hospital. Harvard Business Publications. Retrieved January 19, 2021, from http://snhumedia.snhu.edu/files/course_repository/undergraduate/hcm/hcm400/los_reyes_hospital.pdf...